2013 (6) TMI 526 - AT - Central Excise

Cenvat Credit - inputs used in construction of storage tank temperature controlling facility (Chapter 73.09 or 84.19) - cenvat credit of duty paid on angles and channels used for the construction of Monorail and platform which form part of towers, acid tank etc. forming a part of their plant. - Held that - tank with temperature controlling facility is classifiable under Heading 84.19. The contention raised by the appellants that the storage tanks had such facility is not disputed by any specific finding by the Commissioner (Appeals). So prima facie, we are in agreement with the contention of the appellant that they are eligible for cenvat credit of duty paid on such tank. In the case of Monorail and platform also, we see merit in the argument that these are parts of towers and storage tanks and hence prima facie, the assessee appears to be eligible for cenvat credit following the ratio of decision in the case of C.C.E. v. Rajasthan Spinning and Weaving Mills Ltd. - 2010 (7) TMI 12 - SUPREME COURT OF INDIA - Stay granted.

Summary

Issues: Classification of storage tank for excise duty and cenvat credit eligibility, Classification of angles and channels for cenvat credit eligibility.

In this judgment by Appellate Tribunal CESTAT NEW DELHI, the appellants, who are chemical manufacturers, faced objections from the Revenue regarding the classification of a storage tank for excise duty and cenvat credit eligibility. The appellants initially classified the storage tank under sub-heading 73.09 of the Central Excise Tariff and claimed cenvat credit. The Revenue contended that goods under heading 73.09 would not qualify as capital goods. However, the appellants argued that the correct classification should be under 84.19, where chemical storage tanks are specifically included. The Tribunal found that tanks with temperature controlling facilities fall under Heading 84.19, and since there was no dispute regarding the presence of such a facility in the storage tank, the appellants were deemed eligible for cenvat credit on the duty paid for the tank.

Regarding the cenvat credit eligibility of angles and channels used in the construction of Monorail, platform, towers, and acid tanks, the Revenue disallowed the credit, citing that these items fell under Chapter 73. The appellants contended that these items were essential parts of the towers and tanks, thus should be classified under Chapter 84, making them eligible for cenvat credit. The Tribunal acknowledged the argument, stating that Monorail and platform are indeed parts of towers and storage tanks. Citing a precedent from the case of C.C.E. v. Rajasthan Spinning and Weaving Mills Ltd., the Tribunal granted a waiver of pre-deposit of dues and ordered a stay on the collection of such dues during the pendency of the appeal. The judgment highlighted the importance of correct classification under the Central Excise Tariff for determining cenvat credit eligibility and emphasized the need for specific findings to support objections raised by the Revenue.