2017 (8) TMI 1363 - AT - Central Excise

CENVAT credit - Cement - denial on the ground that the same has been used in the foundation of installation of machinery - Held that - the appellant has rightly availed the Cenvat Credit on cement which has been used in foundation of installation of machinery which is directly or indirectly used in manufacturing final excisable product - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of Cenvat Credit on cement used in the foundation of machinery.

Analysis:
The appellant's Cenvat Credit on cement was denied by the Revenue, arguing that since the cement was used in the foundation of machinery embedded in the earth, it constituted immovable property, making Cenvat credit unavailable. This argument was based on the precedent set by the Larger Bench in the case of Vandana Global Ltd. Vs. CCE Raipur 2010 (253) ELT 440 (Tri-LB).

However, the appellant's counsel referred to the judgment of the Hon'ble High Court of Madras in the case of Dalmia Cements (Bharat) Ltd. Vs. CESTAT Chennai 2016 (341) ELT 102 (Madras) to support their claim. The Madras High Court held that any item used in the factory for installation and operation, directly or indirectly contributing to the manufacturing of excisable goods, entitles the assessee to avail Cenvat Credit.

In light of the arguments presented, the tribunal, per Mr. Ashok Jindal, concluded that the appellant rightfully availed the Cenvat Credit on cement used in the foundation of machinery, which played a direct or indirect role in the manufacturing of the final excisable product. Consequently, the impugned order denying the credit was set aside, and the appeal was allowed. Additionally, a cross-application was disposed of in a similar manner, affirming the appellant's entitlement to the Cenvat Credit on the cement used in the machinery's foundation.