2011 (11) TMI 542 - AT - Central Excise

Availment of CENVAT Credit - Respondents have used MS angles, channels, plates, etc., for welding a structure on which overhead travelling cranes can be installed - Held that - The Tariff is only distinguishing one kind of crane from the other and in this particular case, the reference is to an overhead travelling crane which is placed on fixed support and which travels on such support. It does not automatically mean that the support will also be part of the crane. For example, it cannot be anybody s case that the railway track should be considered as part of the railway engine. As such, argument of the learned counsel which is also the basis of the decision of the lower appellate authority cannot be accepted. The overhead travelling cranes are distinct products classified differently from the rails on which they move and the structures which support the rail. Hence applying the ratio of both Vandana Global (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)) and Saraswati Sugar Mills (2011 (8) TMI 4 - SUPREME COURT OF INDIA), it has to be held that the respondents do not have a case on merits - Decided in favour of Revenue.

Summary

Issues:
Claim for CENVAT credit on steel structural items used for welding a structure for overhead travelling cranes.

Analysis:
The lower appellate authority allowed the appeal on merit without addressing the issue of limitation. The Department appealed, arguing that the structure supporting the overhead travelling crane is not a part or component of the crane, thus CENVAT credit should not be allowed. The Department cited precedents like Vandana Global Ltd. and Saraswati Sugar Mills to support its position.

The respondent's counsel contended that the support structure is integral to the crane based on the Tariff description of "overhead travelling cranes on fixed support." However, the Tribunal rejected this argument, emphasizing that the support is distinct from the crane itself. Drawing parallels, the Tribunal highlighted that just as railway tracks are separate from railway engines, the support structure for the crane cannot be considered part of the crane. Relying on the decisions in Vandana Global and Saraswati Sugar Mills, the Tribunal concluded that the respondents' claim lacked merit, overturning the lower appellate authority's decision and allowing the Department's appeal.

While setting aside the impugned order and allowing the Department's appeal on merit, the Tribunal noted that the lower appellate authority failed to address the limitation issue. Consequently, the matter was remanded to the lower appellate authority to consider the limitation aspect after hearing both sides.