2016 (7) TMI 548 - AT - Central Excise

Cenvat credit disallowedon various MS Plates, Flats, Channels, Angles and Beams etc. - credit was disallowed mainly on the ground that these are general steel items used as support structures in the factory and cannot be considered either as capital goods or as parts and components of any capital goods - Held that - Hon ble Supreme Court in CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. reported in 2010 (7) TMI 12 - SUPREME COURT OF INDIA held in respect of similar type of inputs by applying user test, the credit is available for MS Channels used in fabrication of chimney, categorizing it under the scope of capital goods. Reference can also be had to the decision in CCE, Tiruchirapalli vs. India Cements Ltd. (2013 (1) TMI 5 - Madras High Court ). In the present case on perusal of the certificate given by the Chartered Engineer it is apparent that the specific usage of various MS items relatable to various capital goods have been mentioned. The insistence of learned Commissioner (Appeals) on the drawings and designs of the capital goods is of no relevance considering the above factual position and as supported by Chartered Engineer certificate. - Decided in favour of assessee

Summary

Issues: Disallowance of Cenvat credit on MS Plates, Flats, Channels, Angles, and Beams as capital goods or parts and components.

In the judgment, the appellant challenged the disallowance of Cenvat credit amounting to &8377;1,55,626/- on various MS Plates, Flats, Channels, Angles, and Beams by the Commissioner (Appeals). The disallowance was based on the assertion that these items were general steel items used for support structures in the factory and did not qualify as capital goods or parts and components of capital goods. The appellant submitted a certificate from a Chartered Engineer listing the inputs, quantities, and their usage in making specific items as part of capital goods. The appellant's counsel cited various legal precedents to support their case.

The Authorized Representative argued that the generic MS items in question could not be considered parts and components of capital goods, especially when used for fabricating support structures. The Commissioner (Appeals) heavily relied on a decision by the Larger Bench of the Tribunal, but the Tribunal found the decision in another case more appropriate. The Tribunal referenced a Supreme Court decision and a High Court decision to support the allowance of credit for MS Channels used in fabricating specific items under the scope of capital goods. The Tribunal concluded that the Chartered Engineer's certificate detailing the specific usage of MS items related to various capital goods was sufficient, and the insistence on drawings and designs by the Commissioner (Appeals) was deemed irrelevant in this context.

After analyzing the arguments and legal precedents, the Tribunal held that the impugned order disallowing the Cenvat credit could not be sustained. Consequently, the impugned order was set aside, and the appeal was allowed.