2017 (7) TMI 86 - AT - Central Excise

CENVAT credit - M.S. Channels, beams, joys, round, sheets, angles, plates, rails, sheets, squares and coils etc. - denial on the ground that the same are not confirming to the definition of either inputs or capital goods, as defined in the CCR, 2004 - Held that - the Commissioner (Appeals) has acknowledged receipt of the Chartered Engineer s Certificate produced by the appellant. However, the contents of the Certificate regarding use of the disputed goods for fabrication/manufacture of the capital goods and their components, described therein were not considered while passing the impugned order - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of cenvat credit on disputed goods under Central Excise Tariff Act, 1985.
- Classification of disputed goods as inputs or capital goods.
- Consideration of Chartered Engineer's Certificate as evidence.
- Application of user test to determine eligibility of credit on steel items.

Analysis:
1. The appellant, engaged in manufacturing iron and steel products, availed cenvat credit on various duty paid goods during November 2004 to March 2009. The Department denied the credit, alleging that the goods did not meet the definition of inputs or capital goods as per the Cenvat Credit Rules, 2004.

2. The appellant argued that the disputed goods were used for manufacturing capital goods and their components within the factory. The appellant presented a Certificate by a Chartered Engineer detailing the use of disputed goods for fabrication of capital goods. Despite this evidence, the authorities rejected the claim. The appellant relied on previous tribunal decisions to support their claim for cenvat credit on the disputed goods.

3. The Revenue, represented by the ld. A.R., maintained the findings of the impugned order, opposing the appellant's claim for cenvat credit.

4. The Tribunal noted that the Commissioner (Appeals) had acknowledged the Chartered Engineer's Certificate provided by the appellant. However, the contents of the Certificate were not considered in the impugned order. Referring to a previous case, the Tribunal emphasized the user test principle to determine the eligibility of credit on steel items used in fabrication of capital goods. Citing a Supreme Court decision, the Tribunal concluded that the disputed goods qualified for cenvat credit, overturning the impugned order in favor of the appellant.

5. The Tribunal found no merit in the impugned order and allowed the appeal, granting cenvat credit to the appellant based on the evidence presented and the application of the user test principle.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, the Tribunal's evaluation of the evidence, and the legal principles applied to reach the decision in favor of the appellant.