2016 (1) TMI 1297 - AT - Central Excise

CENVAT credit - cement - structural items - Held that - various items are fabricated at site and later on, erected and bolted to the concrete footing with the help of nuts and foundation bolts - The Hon ble Supreme Court in the case of CCE Vs. Rajasthan Spinning Mills 2010 (7) TMI 12 - SUPREME COURT OF INDIA , while allowing the credit on M.S. items like angles, sheets, etc. evolved user test to determine whether these items can be considered as components or accessories of capital goods on applying this principle - there is no error in the findings by the ld. Commissioner (Appeals) in as far as eligibility of credit on steel structural items. CENVAT credit - cement - Held that - the cement used for constructing under-ground storage tank, which is a civil structure, will not be eligible for CENVAT credit. Appeal allowed - decided partly in favor of assessee.

Summary

Issues:
1. Disallowance of cenvat credit on cement and structural items.
2. Eligibility of steel structural items as components of capital goods.
3. Examination of findings in the impugned order.
4. Allegations regarding acceptance of certificate of Chartered Accountant.
5. Claim for exemption under Notification no.67/95-CE.
6. Usage of cement in construction of support structures.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the disallowance of cenvat credit on cement and structural items by the Revenue, challenging the Order of the Commissioner (Appeals) dated 18.11.2014. The respondent, engaged in manufacturing Iron and Steel products, availed cenvat credit on inputs and capital goods. The Original Authority disallowed the credit on cement and structural items, imposing a penalty, which was set aside by the Commissioner (Appeals), leading to the Revenue's appeal.

The Revenue contested the findings on various grounds, arguing that the steel structures were not components of machineries but for supporting capital goods, and the certificate of Chartered Accountant was accepted without detailed analysis. Additionally, they raised concerns about the eligibility of certain goods and the usage of cement in civil work. The respondent, however, defended the impugned order, stating that all issues were examined with supporting case laws, and the certificate was not the sole basis for allowing credit on items.

Upon examination, the Tribunal found that the Revenue's assertion lacked supporting evidence, while the respondent provided a detailed certificate explaining the usage of steel items in fabricating various capital goods. Referring to the Supreme Court's decision in a similar case, the Tribunal upheld the eligibility of credit on steel structural items but ruled that credit on cement used for civil structures like underground storage tanks was not permissible.

Ultimately, the Tribunal dismissed the appeal, except for the disallowance of cenvat credit on cement, which was deemed ineligible. The detailed analysis highlighted the importance of evidence, case laws, and the distinction between components of capital goods and civil structures in determining cenvat credit eligibility.