2017 (3) TMI 1403 - AT - Central Excise

CENVAT credit - prefabricated construction for cold storage rooms - denial on the premise that the said prefabricated structure are not capital goods as same are classifiable under Chapter 39 of CETA, 1985 - Held that - these prefabricated structures have been used by the appellant for fabrication of cold room which is classifiable under Chapter 84 of the Central Excise Tariff Act - reliance placed on the decision of the CCE Vs. Rane Brake Lining Ltd. 2011 (2) TMI 415 - CESTAT, CHENNAI - appellant is entitle to avail the Cenvat Credit as these prefabricated structures have been used by the appellant for fabrication of cold room which is a capital goods - appeal allowed - decided in favor of assessee.

Summary

Issues:
Denial of Cenvat Credit on prefabricated construction for cold storage rooms.

Analysis:
The appellant, engaged in manufacturing pharmaceutical products, appealed against the denial of Cenvat Credit on prefabricated construction for cold storage rooms. The prefabricated structures were purchased for the fabrication of cold rooms storing drugs at specific temperatures, classified under Chapter 39 of the Central Excise Tariff Act. The denial was based on the argument that these structures were not capital goods under Chapter 39. The appellant contended that the prefabricated structures were used for fabricating cold rooms, classified as capital goods under Chapter 8418. The appellant relied on a precedent involving CCE Vs. Rane Brake Lining Ltd. 2011 (267) ELT 378 (Tri.-Chen) to support their claim.

The appellate tribunal heard arguments from both sides and examined the submissions. It was established that the prefabricated structures were indeed used by the appellant for fabricating cold rooms falling under Chapter 84 of the Central Excise Tariff Act. Referring to the decision in CCE Vs. Rane Brake Lining Ltd., the tribunal emphasized the definition of capital goods under Rule 2(a) of the CENVAT Credit Rules, 2004. The rule includes components, spares, and accessories of goods falling under specified chapters as capital goods, extending the scope of the term. In this case, the components were used to fabricate goods falling under Chapter 84, justifying the appellant's claim for Cenvat Credit.

Consequently, the tribunal ruled in favor of the appellant, allowing them to avail the Cenvat Credit as the prefabricated structures were used for fabricating capital goods, i.e., cold rooms. The impugned order denying the credit was set aside, and the appeal was allowed with any consequential relief deemed necessary.