2015 (4) TMI 204 - AT - Central Excise

CENVAT Credit - whether the appellant is eligible to avail cenvat credit on the inputs viz. Cement, steel used in the manufacture of Silos during the period from September 2004 to March 2005 - Held that - decision of Hon ble Karnataka High Court in the case of CCE Bangalore Vs SLR Steels Ltd. (2012 (9) TMI 169 - KARNATAKA HIGH COURT ) is directly on the present issue in favour of the assessee. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues involved:
1. Eligibility of the appellant to avail cenvat credit on inputs used in the manufacture of "Silos"
2. Interpretation of whether Silos are immovable items and structural materials affecting cenvat credit eligibility
3. Comparison with judgments by the Hon'ble Karnataka High Court in similar cases
4. Application of stay orders and decisions from other cases to the current scenario

Issue 1: Eligibility of cenvat credit on inputs for manufacturing "Silos"
The appellant sought cenvat credit on inputs like cement and steel used in constructing "Silos" for storing cement and raw materials, claiming it as part of the manufacturing process. The Revenue argued that Silos are immovable items, disqualifying the appellant from cenvat credit. The Tribunal examined previous judgments and held that the storage tanks, even if immovable, are integral to the manufacturing process, making the appellant eligible for cenvat credit.

Issue 2: Interpretation of Silos as immovable items affecting cenvat credit eligibility
The Revenue contended that Silos are immovable items, thereby denying cenvat credit eligibility. However, the Tribunal referenced the Hon'ble Karnataka High Court's decisions in similar cases, emphasizing that even if Silos are immovable, they are essential components of the manufacturing process, aligning with the definition of capital goods, thus allowing cenvat credit for the appellant.

Issue 3: Comparison with judgments by the Hon'ble Karnataka High Court
The Tribunal extensively referred to the Hon'ble Karnataka High Court's decisions in cases involving storage tanks and structural items, highlighting the consistent stance favoring the allowance of cenvat credit for such components integral to the manufacturing process. The Tribunal's decision in the present case was influenced by the precedents set by the Hon'ble Karnataka High Court, ensuring uniformity in interpreting cenvat credit eligibility.

Issue 4: Application of stay orders and decisions from other cases
The parties cited stay orders and decisions from other cases to support their arguments regarding cenvat credit eligibility. The Tribunal differentiated the applicability of these references, emphasizing the relevance of specific judgments, like the one by the Hon'ble Karnataka High Court in a similar case, over general decisions from other High Courts. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant.

This detailed analysis of the judgment addresses the issues involved comprehensively, focusing on the eligibility of cenvat credit for inputs used in manufacturing "Silos," the interpretation of Silos as immovable items, the influence of judgments by the Hon'ble Karnataka High Court, and the application of stay orders and decisions from other cases in determining the outcome of the appeal.