2015 (10) TMI 332 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - Held that - On perusal of the detailed verification report and the observations of Commissioner (Appeals), I find that these items were found to be used as components in the manufacture of Match Plates, Moulding Boxes, Sand Mixers, Conveyor and Furnaces. According to the Department, Match Plates, Moulding Boxes, Sand Mixers, Conveyor and Furnaces are supporting in the manufacture of castings. The appellant submitted a Chartered Engineer s certificate dt.14.06.2011 stating that these items were used in the manufacture of accessories and components including moulding boxes for smooth running of the machinery. It is also stated that the actual manufacturing process is carried out by Match Plates, Moulding Boxes, Sand Mixers, Conveyor and Furnaces. It is apparent from the report and the certificate that these items were used as components of the machinery for manufacturing of casting. - it is clearly evident from the records that these items were used as components of Match Plates, Moulding Boxes, Sand Mixers, Conveyor and Furnaces used in the manufacture of final product casting. As the items are used as components, the Appellants are eligible to avail CENVAT Credit thereon. - impugned order is not sustainable - Decided in favour of assessee.

Summary

Issues:
- Denial of CENVAT Credit on certain items used in manufacturing.
- Contention on merit and limitation.
- Classification of items as components or vital parts.
- Interpretation of relevant case laws.
- Eligibility of CENVAT Credit on items used as components.

Analysis:
The case involved the denial of CENVAT Credit on items used in manufacturing steel and engineering products. The appellants availed credit on various items like Channels, Beams, Angles, Bars, etc., which were challenged by a show cause notice. The Adjudicating authority disallowed the credit, leading to a penalty. The Commissioner (Appeals) upheld this decision.

The Appellant contested the demand on merit and limitation grounds. They argued that the items were components of machinery, citing a verification report. They relied on Tribunal and Supreme Court decisions to support their claim and argued that the demand was time-barred as they had disclosed the credit in their records.

The Revenue representative reiterated the findings of the Commissioner (Appeals) and pointed out a contradiction in the appellant's submission regarding the classification of items as components or vital parts contributing to product efficiency.

Upon review, the judge found that the items in question were indeed used as components in the manufacturing process. A Chartered Engineer's certificate supported this claim. Referring to relevant case laws, including a Supreme Court decision, it was established that items used in the manufacture of machinery are eligible for CENVAT Credit.

Based on the evidence and legal precedents, the judge concluded that the items were used as components in the manufacturing process, making the appellants eligible for CENVAT Credit. Consequently, the impugned order disallowing the credit was set aside, and the appeal filed by the Appellant was allowed.