2011 (7) TMI 607 - AT - Central Excise

Eligibility of credit to steel plates, angles, channels, beams, CTD bars, joist and H.R. Rolls etc. used for manufacture of components and parts of machinery which, in turn, are used for replacement of worn-out machinery - credit in respect of cleanflow - Held that - Input duty credit on cleanflow, one of the chemicals used by the appellants, has been allowed in the appellant s own case by Tribunal in earlier year hence similar benefit is allowed in respect of the same for the period covered under the present appeals. In the present case, the materials available before us is not enough to decide as to whether the impugned steel items have been used for manufacture of parts and components or not. Hence, matter is remanded to the original authority for verifying the actual use of the impugned steel items and decided accordingly in the light of the decision in case of Vandana Global Ltd.(2010 - TMI - 76147 - CESTAT, NEW DELHI (LB))

Summary

Issues: Eligibility of input duty credit for steel items and cleanflow.

Analysis:
1. Eligibility of input duty credit for steel items:
The appellant argued that certain steel items used for manufacturing components and parts of machinery, which are further used for replacing worn-out machinery, should be eligible for input duty credit. Citing a decision by the Hon'ble Rajasthan High Court, the appellant sought credit for these items. On the other hand, the Department contended that it was unclear from the records which steel items were used for manufacturing machinery components. The Department also highlighted that some steel items were not components of machinery. The Tribunal, after considering both sides' submissions and case records, referred to a previous decision and concluded that a remand was necessary to determine if the steel items were used for eligible purposes. The Tribunal noted that the available material was insufficient to make a definitive decision on the eligibility of the steel items for credit.

2. Eligibility of input duty credit for cleanflow:
The appellant requested input credit for cleanflow items, citing a previous decision where such credit was allowed. The Department supported the disallowance of credit for cleanflow, referring to previous Tribunal decisions. The Tribunal, after reviewing the arguments and records, found that input duty credit for cleanflow had been allowed in the appellant's own case previously. Therefore, the Tribunal saw no reason to deny similar benefits for the period covered by the present appeals. Consequently, the impugned order was modified to allow input duty credit for cleanflow items.

In conclusion, the Tribunal modified the impugned order to allow input duty credit for cleanflow items and remanded the decision regarding the eligibility of steel items for credit back to the original authority for further verification. The Tribunal emphasized the need for a more thorough examination of the actual use of the steel items to determine their eligibility for cenvat credit based on relevant legal precedents.