2013 (2) TMI 7 - AT - Central Excise

Cenvat credit on HR Coils, MS Plates, Channels, HR Plates denied - Held that - As there was no allegation that the storage tanks which were fabricated out of these inputs were embedded to the earth the factual findings of the FAA are not disputed in the grounds of appeal anywhere nor is there any allegation in the show cause notice thus eligible to avail cenvat credit, as decided in cases Ispat Industries Limited case 2005 (9) TMI 171 - CESTAT, MUMBAI , KCP LTD. 2008 (10) TMI 177 - CESTAT, BANGALORE , SHREE VIRANGANA STEEL LTD 2007 (11) TMI 295 - CESTAT, MUMBAI.

Summary

Issues:
Eligibility of cenvat credit on HR Coils, MS Plates, Channels, Angles for the construction of storage tanks.

Analysis:
The appeal was filed by the Revenue against an order in appeal, where the respondent availed cenvat credit on various materials for constructing storage tanks. The Revenue contended that these materials were not eligible for cenvat credit as capital goods. The first appellate authority set aside the original order and allowed the appeal. The Revenue appealed on the ground that the storage tanks were embedded to the earth, making them ineligible goods as per a previous Tribunal ruling.

The Tribunal analyzed the issue and found that the respondent used the disputed goods for fabrication of storage tanks, supported by certificates from relevant parties. These certificates were not disputed by the adjudicating authority. The Tribunal accepted the certificates and concluded that the goods were used in the manufacture of capital goods, making them eligible for cenvat credit. The Tribunal referenced previous cases where cenvat credit on similar goods was allowed if used in the manufacture of capital goods.

The Tribunal noted that there were contradictory decisions regarding the admissibility of cenvat credit on iron and steel items used for the support of capital goods. However, based on Explanation 2 to Rule 2(k) of Cenvat Credit Rules, the Tribunal consistently held that if goods of Chapter 72 are used in the fabrication of capital goods for manufacturing final products, cenvat credit is eligible. The Tribunal found no evidence that the storage tanks were embedded to the earth, as alleged by the Revenue, and upheld the decision of the first appellate authority based on factual findings and previous Tribunal decisions.

In conclusion, the Tribunal found the impugned order to be correct, legal, and without any infirmity, rejecting the Revenue's appeal. The decision was based on the factual findings and the consistent interpretation of the law regarding the eligibility of cenvat credit on the disputed goods used for the fabrication of capital goods.