2016 (8) TMI 535 - AT - Central Excise

Cenvat credit - ceramic/refactory items brass tubes and supporting structures - not confirmed to the definition of capital goods in terms of Rule 57Q - Held that - the ld. Commissioner (Appeals) is in error in denying the credit of ceramic/refractory items i.e brass tubes. I hold that they qualify as components and accessories of boiler (plant) and accordingly, the same is held eligible for modvat credit. Further, so far as supporting structures are concerned following the ruling of the Honourable Supreme Court in the case of Scientific Engineering House Private Ltd. Vs. CIT 1985 (11) TMI 1 - SUPREME Court and the ruling of this Tribunal in the case of Shakumbari Sugar and Allied Industries Ltd. versus CCE, Meerut I 2012 (12) TMI 220 - CESTAT, NEW DELHI , I hold that the appellant will be entitled to modvat credit on supporting structures which have been brought in the factory of production till 15.3.1995. - Decided in favour of appellant with consequential relief

Summary

Issues:
Disallowance of Cenvat credit on ceramic/refractory items, brass tubes, and supporting structures.

Analysis:
The appellants, sugar and molasses manufacturers, appealed against the disallowance of Cenvat credit on certain items. The dispute arose when the Asstt. Commissioner disallowed modvat credit due to late filing of a declaration for availing credit of capital goods. However, in a previous Tribunal order, the late filing was condoned, and the matter was remanded to determine if the goods qualified as capital goods. Subsequently, the Asstt. Commissioner allowed partial Cenvat credit but disallowed credit on ceramic/refractory items, brass tubes, and certain supporting structures. The Commissioner (Appeals) upheld this disallowance, citing the definition under Rule 57Q CER, 1944, which did not include these items as capital goods before a specific date. The appellant then appealed to the Tribunal, arguing that components, parts, and accessories eligible under Rule 57Q were used with a boiler, which qualifies as a plant. They also referenced a previous Tribunal ruling that eligible capital goods included items like wires, cables, and control panels before a certain date. The Tribunal agreed with the appellant, holding that ceramic/refractory items and brass tubes qualified as components and accessories of a boiler and were eligible for credit. Additionally, based on previous rulings and the definition of capital goods, the Tribunal allowed credit on supporting structures brought into the factory before a specific date.

In conclusion, the Tribunal allowed the appeal, granting the appellant entitlement to modvat credit on ceramic/refractory items, brass tubes, and supporting structures. The decision was based on the items qualifying as components and accessories of a plant, in line with previous rulings and the definition of capital goods. The appellant was granted consequential benefits in accordance with the law.