2010 (9) TMI 394 - AT - Central Excise

Cenvat credit steel items used in manufacture of capital goods - goods like cement and steel items used for laying foundation and for building supporting structures cannot be allowed credit but does not deny credit in respect of steel items used for fabricating parts and machinery - department s appeal fails

Summary

Issues:
1. Appeal regarding credit allowed on Non-alloy Steel Flat, M.S. Plates, M.S. Joists, M.S. Rounds, M.S. Angles, HR Sheets, M.S. Flats, and M.S. Channels for manufacturing capital goods.
2. Appeal regarding credit allowed on Non Ferric Alum used for recovering cryolite in the manufacture of aluminum.

Analysis:

1. The judgment addressed the department's appeal concerning the credit allowed on various steel items used in manufacturing capital goods. The Ld. Advocate argued that these items were utilized for producing components of capital goods, and the Cenvat Credit Rules at the relevant time permitted credit on duty paid for inputs used in manufacturing capital goods. The rules also encompassed components of capital goods within the capital goods definition. Citing a decision by the Hon'ble Madras High Court, which allowed cenvat credit on similar items for fabricating electrolytic parts, the Ld. Advocate contended that denying credit for the impugned steel items would be unjustified. Additionally, referencing the Larger Bench decision in Vandana Global Ltd. v. CCE, Raipur, it was highlighted that steel items used for fabricating parts and machinery were eligible for credit. Consequently, the department's appeal on this issue was deemed unsustainable.

2. The second issue in the judgment pertained to the department's appeal regarding the credit allowed on Non Ferric Alum used for recovering cryolite in the manufacturing process of aluminum. The tribunal noted that a previous decision by the Hon'ble Madras High Court had permitted credit for Non Ferric Alum used in a similar context. Given this precedent, the tribunal found that the department's appeal on this specific matter was not tenable. Consequently, the tribunal rejected the department's appeal in its entirety.

In conclusion, the judgment comprehensively analyzed and dismissed the department's appeals concerning the credit allowed on steel items for manufacturing capital goods and Non Ferric Alum used in aluminum production. The decision was based on legal interpretations, precedents, and the application of relevant provisions under the Cenvat Credit Rules.