2017 (3) TMI 651 - AT - Central Excise

CENVAT credit - MS items - Held that - The period involved is prior to 07.07.2009 when the explanation in the definition of inputs was introduced restricting the use of MS items - The issue whether MS items used for fabrication of capital goods is eligible for credit is well settled by various judgments as in the case of Ultra Tech Cements Ltd., 2016 (1) TMI 520 - CESTAT NEW DELHI relied upon by the appellant. Following the same, the disallowance of credit is unjustified - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Appeal against disallowance of credit on MS items under CENVAT scheme.

Analysis:
1. Background: The appellant, engaged in manufacturing Plain/Melamine Faced Particle Boards, availed CENVAT Credit on MS items like Plates, Channels, Joists, etc., categorized as capital goods. A show cause notice was issued proposing disallowance of credit, recovery with interest, and penalty.

2. Appellant's Arguments: The appellant contended that MS items were used in fabricating parts of capital goods like Pollution Control Equipment, Boilers, etc., making credit admissible. They argued no suppression of facts as ER-1 returns disclosed credit availed on MS items. Cited judgments in support of their claim.

3. Respondent's Arguments: The respondent reiterated findings in the impugned order, stating necessary documents weren't provided to establish MS items' use in capital goods fabrication. Alleged suppression of facts due to non-disclosure of credit availed.

4. Judgment: The Tribunal noted the period pre-dated the restriction on MS items' use in inputs. The show cause notice invoked a judgment to disallow credit post-fabrication when capital goods are fixed to earth. Tribunal found MS items were used in fabricating parts of capital goods, citing settled judgments. Held disallowance of credit unjustified, setting aside the impugned order and allowing the appeal with consequential reliefs.

This detailed analysis covers the background, arguments from both parties, and the Tribunal's judgment, providing a comprehensive understanding of the legal issues involved in the case.