2016 (11) TMI 1273 - AT - Central Excise

Denial of CENVAT credit - angles, channels, joist, beam etc - Held that - in the present appeal, the emphasis by Revenue that only immovable structure emerges after fabrication is misplaced. Most of the capital goods are to be held in place for their operation. It is no ones case that products which are to put in place firmly for further operation will automatically become immovable property. No such sweeping assertion can be made without examining the nature of machinery or structure or in the manner of installment. We find no evidence in the present appeal to arrive at contrary view against the findings of the lower authorities - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against Commissioner (Appeals) order dated 17.3.2008 regarding cenvat credit availed on materials like angles, channels, joist, beam.
- Determination of whether items used by the respondent qualify as "capital goods" under Cenvat Credit Rules, 2004.
- Examination of the nature and purpose of items used by the respondent in the manufacturing process.
- Interpretation of the scope of inputs as per Rule 2 of Cenvat Credit Rules, 2004.
- Assessment of whether fabricated items become immovable structures not liable to excise duty.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI involved the Revenue challenging the order of the Commissioner (Appeals) regarding the availing of cenvat credit by the respondents on materials like angles, channels, joist, and beam. The Revenue contended that these items were used in the manufacture of supporting structures, arguing that the fabricated items do not fall under the category of "capital goods." The Tribunal noted that the lower authorities had examined the nature and purpose of the items used by the respondents in detail. It was observed that the lower authorities had found that the fabrication of various items using angles, channels, etc., was essential for the manufacture of sponge iron, indicating that these items were indeed integral to the manufacturing process.

The Tribunal further analyzed the scope of inputs under the Cenvat Credit Rules, 2004, and emphasized that the lower authorities had considered a large number of decided cases to arrive at their conclusion. The Tribunal highlighted that the Revenue's assertion that only immovable structures emerged after fabrication was misplaced. It was noted that most capital goods need to be held in place for their operation, and the mere fact that items are firmly installed does not automatically classify them as immovable property. The Tribunal found no evidence in the appeal to contradict the findings of the lower authorities, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal upheld the decision of the lower authorities, emphasizing the importance of examining the nature and purpose of items used in the manufacturing process to determine their classification under the Cenvat Credit Rules. The judgment underscored the need for a detailed assessment based on the specific facts of the case and existing legal precedents to reach a reasoned conclusion regarding the eligibility of items for cenvat credit.