2017 (2) TMI 877 - AT - Central Excise

CENVAT credit - holdings - denial on the ground that holdings used as support structures for the factory shed as well as the EOT cranes - Held that - In fact crane column is used to hold crane girders in position properly while the crane is working. In view of this use, it is essential accessories for EOT crane installed in the appellant s factory as EOT crane cannot function without the crane column - the impugned order on which credit has been denied is covered in the scope of the terms accessories , in the definition of capital goods at clause (ii) of Rule 2(b) of Cenvat Credit Rules, 2004 because it is specifically designed fabricated/manufactured as per specific technical requirement - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Admissibility of Cenvat credit on HR coils, HR steel plates, beams used for fabrication of girders and columns for EOT cranes.

Analysis:
The appeal challenged an order by the Commissioner (Appeals) partially allowing Cenvat credit on certain capital goods but denying it for columns used as support structures for factory shed and EOT cranes. The appellant, a manufacturer of pig iron alloy and non-alloy steels, faced a show cause notice alleging inadmissible credit on HR coils, HR sheets, plates, and beams used as columns for EOT crane erection. The Commissioner held that while girders were eligible for credit due to their essential role in EOT crane movement, columns were not, being considered support structures. The appellant contended that columns were crucial for vertical support, horizontal movement, and operation of the crane. The appellant cited legal precedents to support their argument, emphasizing the technical necessity of the columns in crane operation.

The Tribunal analyzed the case, noting that the crane column was indispensable for holding crane girders in place during crane operation. Referring to a previous case involving a similar issue, the Tribunal determined that crane columns fell within the definition of "accessories" under the Cenvat Credit Rules. The Tribunal emphasized that the columns were specifically designed and manufactured to meet technical requirements, making them eligible for Cenvat credit. Additionally, the Tribunal highlighted the lack of evidence from the Revenue to prove non-usage of these goods in the factory, as required by the rules. Consequently, the Tribunal concluded that the impugned order was legally unsustainable and set it aside, allowing the appeal and granting any consequential relief to the appellant.

In conclusion, the Tribunal's judgment clarified the admissibility of Cenvat credit on capital goods used in crane fabrication, emphasizing the technical necessity and specific design of the components. The decision underscored the importance of meeting the conditions stipulated in the Cenvat Credit Rules and the need for evidence to support any denial of credit.