2013 (7) TMI 400 - AT - Central Excise

Chapter 72 items - Denial of cenvat credit on MS Plates, HR Sheets etc. on the ground that these items fall under Chapter-72 and are not capital goods - Certificate issued by the Chartered Engineers, clearly indicates that the MS plates, HR Sheets etc. are utilized for fabrication of various parts of ducts for Chimney at their HAG plant. The Chartered Engineer s certificate also indicates that the material is used for fabrication of new Chloro Tank etc. - Rejection of credit only on the ground that the Jurisdictional Assistant Commissioner filed report that the assessee had no record to justify their claim Held that - Rule 2(k) of the Cenvat Credit Rules, 2004 will come to the rescue of the appellant - The decisions in the case of Rajasthan Spinning & Weaving Mills Ltd. 2010 (7) TMI 12 - SUPREME COURT OF INDIA and in the case of L. H. Sugar Factories Ltd. 2009 (9) TMI 431 - CESTAT, NEW DELHI etc are directly applicable and it is to be held that the appellant herein is eligible to avail cenvat credit of the duty paid on the items i.e. MS plates and HR sheets, which according to Chartered Engineer s certificate are mostly used for fabrication of machinery Decided in favor of Assessee.

Summary

Issues:
- Availment of cenvat credit on capital goods under Chapter 72
- Utilization of MS Plates and HR Sheets for manufacturing final products
- Interpretation of Rule 2(k) of the Cenvat Credit Rules, 2004

Availment of Cenvat Credit on Capital Goods under Chapter 72:
The case involved a dispute regarding the availment of cenvat credit on capital goods under Chapter 72 of the Central Excise Tariff Act, 1985. The appellant had availed cenvat credit on duty paid on capital goods, which was challenged by the authorities. The Adjudicating Authority confirmed the demand for wrongly availed cenvat credit along with interest and imposed a penalty. The First Appellate Authority upheld the decision of the Adjudicating Authority, leading to the appellant filing an appeal before the Appellate Tribunal.

Utilization of MS Plates and HR Sheets for Manufacturing Final Products:
The appellant contended that the MS Plates and HR Sheets, on which credit was availed, were utilized for the fabrication of various parts required for manufacturing final products like chemicals. The appellant provided a certificate issued by a Chartered Engineer to support their claim. The appellant relied on various judicial precedents, including judgments from the Supreme Court and High Courts, to argue that the issue was settled in their favor. On the other hand, the Additional Commissioner argued that the plates were used for repair and maintenance purposes, making the credit on duty paid ineligible.

Interpretation of Rule 2(k) of the Cenvat Credit Rules, 2004:
The Tribunal analyzed the submissions from both sides and examined the evidence presented. The Tribunal found that the Chartered Engineer's certificate clearly indicated that the MS Plates and HR Sheets were used for the fabrication of machinery and parts required for manufacturing processes. The Tribunal disagreed with the lower authorities' findings and held that Rule 2(k) of the Cenvat Credit Rules, 2004 supported the appellant's claim. Considering the facts and circumstances of the case, along with the applicable legal precedents cited by the appellant, the Tribunal concluded that the appellant was eligible to avail cenvat credit on the items in question. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.