2011 (7) TMI 601 - AT - Central Excise

Cenvat credit of duty paid on various structural steel items like M.S.Angles, M.S.Channels, M.S.Joists, Chequered Plates, Gratings etc., used in factory premises for fabrication of supporting structure of various machines - Held that - Issue is squarely covered by the decision of the Larger Bench of the Tribunal in the case of Vandana Global Ltd.(2010 - TMI - 76147 - CESTAT, NEW DELHI (LB) ) wherein the Tribunal has held that the cement and steel items used for laying foundation and bulding structural support are not covered under Rule 2(a) of Cenvat Credit Rules, 2004. Hence, credit availed on the steel structural items is not admissible to the respondents - Decided in favor of Revenue.

Summary

Issues:
Admissibility of cenvat credit on structural steel items used for fabrication of supporting structures of various machines in a factory.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise, Raipur, which upheld the original authority's decision. The respondents, engaged in manufacturing activities falling under Chapter 72 of the Central Excise Tariff Act, availed cenvat credit on various structural steel items like M.S. Angles, M.S. Channels, M.S. Joists, Chequered Plates, and Gratings, used for fabricating supporting structures in their factory. The Revenue contended that the credit availed on these items was inadmissible as they were not directly related to the manufacture of capital goods or their components. A show cause notice was issued to the respondents proposing duty demand and penalty, which was later dropped by the original authority. The Revenue appealed to the Commissioner (Appeals), who upheld the original decision, leading to the current appeal before the Tribunal.

During the hearing, only the learned SDR for the Revenue appeared, while no representation was made on behalf of the respondents. The central issue in this case was whether the cenvat credit on the structural steel items used for fabricating supporting structures of various machines in the factory was admissible. The Revenue relied on the decision of the Larger Bench of the Tribunal in the case of Vandana Global Ltd. vs. CCE, Raipur, where it was held that items like cement and steel used for laying foundation and building structural support were not covered under the Cenvat Credit Rules. The Tribunal found that the issue at hand was squarely covered by the decision in the Vandana Global Ltd. case, and therefore held that the credit availed on the steel structural items was not admissible to the respondents. Consequently, the departmental appeal was allowed, and cross objections were disposed of accordingly.

In conclusion, the Tribunal ruled in favor of the Revenue, holding that the cenvat credit on structural steel items used for fabricating supporting structures in the factory was not admissible to the respondents based on the precedent set by the Larger Bench of the Tribunal in a similar case.