2016 (1) TMI 61 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - goods claimed to have been manufactured using these items are not capital goods, but structural items used for erection and installation of capital goods - Held that - Onus whether the impugned items were inputs used for manufacture of final products is on the respondents/assessee - Revenue has not adduced any evidence to show that these items were used in making of structures embedded in the earth for support of machinery or the building. So also there is no case that it was used for construction of factory shed, or laying foundation. The Technical Certificate shows the quantity of these items used for making of storage tank for raw material, conveyor system, kiln cooler & chimney, Transfer Chutes, Intermediate Bin and Storage Tank for products. These goods are covered under Chapter 84 of the CETA 1985. The respondents have established that the steel items were not used for laying foundation or for building supporting structures and therefore the facts of the instant case, in my view, is outside the purview of application of the principle laid in Vandana Global Case (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ). - Decided against Revenue.

Summary

Issues: Admissibility of Cenvat credit on items used in the manufacture of Sponge Iron.

Analysis:
1. Facts and Allegations: The respondents availed Cenvat Credit on various items during 2005-06 to 2006-07, claiming them to have been used in the manufacture of capital goods. The primary adjudicating authority disallowed the credit, stating that the items were structural and not capital goods.

2. Arguments by Revenue: The Revenue argued based on the definition of inputs and an amendment to the Cenvat Credit Rules in 2009. They also cited a decision by the larger bench of the Tribunal in Vandana Global Ltd. case.

3. Respondents' Defense: The respondents contended that the items were used to manufacture parts and components for Sponge Iron production. They presented a certificate detailing the quantity of items used for various purposes. They also referred to a judgment in UOI Vs. Associated Cement Co. Ltd.

4. Decision: The Tribunal held that the onus was on the respondents to prove that the items were used in the manufacture of final products. Since the Revenue failed to show otherwise, and the items were not used for construction or support structures, the credit was allowed. The Tribunal relied on the judgment in Union of India Vs. Associated Cement Co. Ltd. and Commissioner Vs. Rajasthan Spinning & Weaving Mills Ltd. to support its decision.

5. Conclusion: The appeal by Revenue was dismissed, and the Tribunal found no merit in their arguments. The judgment was pronounced on 17.8.2015 by Sulekha Beevi CS, Member (J).