2016 (8) TMI 888 - AT - Central Excise

Cenvat credit - duty paid on various iron and steel articles like plates, rounds, sheets, bars, joist and angles etc. - goods used in fabrication of the capital goods as supporting structures - Held that - the items in question were used in fabrication of the capital goods in which case even Larger Bench decision of Vandana Global Ltd. 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) , which allows the credit, does not stand rebutted or even challenged by the Revenue, the point also stand decided by recent decision of Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd. vs. CCE & Cus 2015 (5) TMI 663 - GUJARAT HIGH COURT . It stand observed in the said decision of the Hon ble High Court that the decision of the Larger Bench in the case of Vandana Global Ltd. is not appropriate. - Decided against the Revenue

Summary

Issues:
- Availment of Cenvat credit on iron and steel articles used as component parts of machines.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi stemmed from the rejection of the Revenue's appeal by the Commissioner (Appeals), who ruled in favor of the assessee regarding the availment of Cenvat credit on duty paid for various iron and steel articles. Both the original adjudicating authority and the appellate authority found that the items in question were used as component parts of machines, supporting their conclusion with detailed evidence. The reviewing authority's observation that the items were used as supporting structures lacked substantiating evidence to prove they were not utilized in the fabrication of capital goods. The Revenue failed to challenge this factual finding before the Tribunal, focusing instead on the argument that using the items as supporting structures disqualified them from claiming duty credit, citing the Vandana Global Ltd. decision by the Tribunal. However, the respondent's advocate highlighted a previous Tribunal decision in the same assessee's case, where the items were deemed to be used in the fabrication of machines, a ruling upheld by the High Court of Chhattisgarh. Moreover, the Gujarat High Court's recent decision in Mundra Ports & Special Economic Zone Ltd. vs. CCE & Cus disapproved of the Vandana Global Ltd. decision, further supporting the assessee's position.

The Tribunal, after considering the factual findings of the lower authorities and the lack of challenge or rebuttal by the Revenue, dismissed the Revenue's appeal, citing the established use of the iron and steel articles in the fabrication of capital goods. The Tribunal's decision aligned with the precedents set by previous Tribunal and High Court rulings, emphasizing that the items in question were indeed utilized in the manufacturing process, thus entitling the assessee to claim Cenvat credit. The rejection of the Revenue's appeal was based on the conclusive evidence presented and the absence of substantive arguments against the established use of the items in the fabrication of capital goods.