2013 (12) TMI 283 - AT - Central Excise

Goods to be considered as capital goods or not Waiver of Pre-deposit Held that - MS channels, angles, platforms, structures etc. cannot be considered as machinery under CETH 8419 - Machinery is something used for manufacture or processing or working upon some materials. -The platform does not do any of these and, therefore, from a common sense perception, platform is not machinery but it is only a supporting structure for the machinery Following Vandana Global Ltd. Versus CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - cement and steel items used for foundation or building supporting structures for capital goods cannot be considered as capital goods or parts or accessories of capital goods - iron and steel structures manufactured and captively used cannot be considered as capital goods eligible for Modvat/Cenvat credit - The appellant is directed to make a pre-deposit of the entire amount of CENVAT credit taken wrongly along with interest as pre-deposit - upon such submission rest of the amount to be stayed till the disposal Stay granted.

Summary

Issues:
Denial of CENVAT credit on iron and steel items used in fabrication of platforms within the factory of production.

Analysis:
The appeal and stay petition were filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals). The impugned order upheld the denial of CENVAT credit amounting to Rs. 4,53,521/- availed by the appellant on iron and steel items used in the fabrication of platforms. The appellant's counsel argued that the appellant initially took credit on MS angles and channels as capital goods, but upon the department's notification, reversed the credit. However, the appellant later retook the credit under the category of inputs. The Tribunal observed that the appellant's actions seemed like a camouflage to avail ineligible credit, as platforms cannot be considered machinery under the relevant classification. Citing precedents, the Tribunal noted that items used for supporting structures generally do not qualify as capital goods. The appellant's conduct indicated a disregard for the law in seeking CENVAT credit improperly. The Tribunal found no grounds for granting a stay, as the appellant did not demonstrate any financial hardship.

The Tribunal directed the appellant to pre-deposit the entire amount of wrongly taken CENVAT credit along with interest within eight weeks. Compliance was required by a specified date, and upon such compliance, the pre-deposit of the remaining dues, including any penalty, would be waived, and recovery stayed during the appeal's pendency. The decision was based on the lack of merit in the appellant's case and the absence of evidence of financial hardship. The Tribunal's ruling aligned with the principle of upholding the balance of convenience, as established in relevant case law.