2017 (2) TMI 300 - AT - Central Excise

CENVAT credit - Hot Rolled Plate - Sleeve Washer - Runner Washer - M S Billets - H.R. Coils - M.S. Angel - M.S. Channel - M.S. Bars - T.O. R. Steel Bar - H.R. Non Alloyed Steel Plate - Round - G.S. Thermax-415 - Grease - Industrial Lubricant etc. - denial on the ground that these goods are not falling under the definition of Capital goods - Held that - It is necessary to find out the use of the goods without that it cannot be concluded whether its credit is admissible or otherwise - the impugned order set aside and matter remanded to the original adjudicating authority for passing a fresh speaking order after verifying the facts of use of the material in the factory of the appellant - appeal allowed by way of remand.

Summary

Issues:
1. Denial of Cenvat credit on various items used in manufacturing.
2. Interpretation of the definition of Capital goods and inputs.
3. Applicability of the amendment excluding certain structural steel material from the definition of input.
4. Lack of consideration of evidence regarding the use of goods in the manufacturing process.

Analysis:
1. The appellant, engaged in manufacturing TMT Bars, M.S. Ingots, M.S. Scrap, and Miss Rolls, availed Cenvat credit on several items. The lower authorities denied the credit, stating these goods did not fall under the definition of Capital goods. The appellant contended that the items were used for fabrication, erection, and commission, making them eligible as inputs for manufacturing Capital goods. They provided details and photographs of the usage, which were not considered. The Tribunal noted the need to establish the actual use of the goods before determining credit admissibility, leading to remanding the matter for fresh adjudication.

2. The appellant argued that the goods in question were used in manufacturing machines or parts, making them eligible for credit. They cited various judgments supporting their position. The Revenue, however, reiterated the denial of credit, stating the goods did not qualify as inputs or capital goods under Chapter 72. The Tribunal observed the lack of detailed examination of the usage of disputed goods and emphasized the necessity to ascertain their use before making a final decision on credit admissibility.

3. The appellant highlighted the inapplicability of an amendment excluding certain structural steel material from the definition of input, as it was introduced after the relevant period. The Tribunal acknowledged this argument but focused on the primary issue of determining the actual use of the goods in question. The case was remanded for a fresh adjudication based on evidence of material usage in the manufacturing process.

4. The Tribunal noted the failure of the adjudicating authorities to thoroughly examine the evidence provided by the appellant regarding the use of disputed goods. Despite the submission of details and photographs, the authorities did not consider this crucial aspect in their decision-making process. The Tribunal emphasized the importance of evaluating the factual use of goods to establish their eligibility for credit, leading to the decision to remand the case for a detailed reconsideration by the original adjudicating authority.