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2015 (5) TMI 1091 - AT - Central ExciseCENVAT credit - MS sheet, MS coils, etc - denial on the ground that these items do not qualify as input/capital goods as per Rule 2 of the CCR, 2004 - Held that - appellant has correctly taken the Cenvat credit on these items as these items have been used by them for fabrication on MS Trays (capital goods) which are ultimately used for manufacturing of final product - credit allowed - appeal allowed - decided in favor of appellant.
Issues:
Appeal against denial of Cenvat credit on steel items as input/capital goods. Analysis: The appellant, a manufacturer of malt products, appealed against orders denying Cenvat credit on steel items like MS sheet and coils, stating they were procured for fabrication of MS trays used in manufacturing. The appellant informed the department beforehand about availing Cenvat credit on these items. An audit revealed the credit taken, leading to a show cause notice as the items were deemed ineligible. Lower authorities upheld the denial citing lack of evidence on item usage. The appellant argued they had informed the department and provided a detailed usage chart, unchallenged by the Revenue, justifying the credit. The Revenue contended the appellant failed to prove item usage for capital goods fabrication, shifting the burden of proof onto the appellant as per Rule 9(5) of the Cenvat Credit Rules, 2004. The Tribunal noted the appellant's intimation to the department about procuring MS sheets/coils for MS tray fabrication through a job worker for final product manufacturing. The appellant's detailed usage chart was presented, unaddressed by the lower authorities, resulting in a blanket denial of credit. The Tribunal emphasized that the burden of proof rested on the Revenue to show the items were not used as intended, which they failed to do. Consequently, the documents furnished by the appellant were deemed sufficient to support the Cenvat credit claim. In conclusion, the Tribunal held that the appellant rightfully availed Cenvat credit on the steel items, as they were utilized in the fabrication of MS trays (considered capital goods) crucial for the final product manufacturing process. The impugned order was found to lack merit and was set aside, allowing the appeals with any consequential relief.
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