2017 (7) TMI 384 - AT - Central Excise

CENVAT credit - steel items were used for making steel structure for erection installation of plant and machinery - Held that - since the goods in question were excluded explicitly w.e.f. 7-7-2009 in the definition of input that itself shows that prior to the amendment the same was included in the definition of input - CENVAT credit in respect of HR sheet and M.S Plates etc is admissible to the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
Applicability of Cenvat credit on steel items used for making steel structures for plant and machinery installation; Interpretation of retrospective effect of amendment dated 7-7-2009 on definition of input; Admissibility of Cenvat credit based on judicial precedents.

Analysis:
The case involved a dispute regarding the appellant availing Cenvat credit for steel items like HR sheets and MS plates used in constructing steel structures for plant and machinery installation. The adjudicating authority upheld the denial of Cenvat credit, citing the Vandana Global Ltd. case where it was decided that the amendment on 7-7-2009, excluding these goods from the input definition, had retrospective effect. The Commissioner(Appeals) also rejected the appeal based on this precedent.

The appellant argued that the amendment was not clarificatory but prospective in nature, citing the Gujarat High Court's decision in a similar case. The appellant claimed that since the period in question was before the 2009 amendment, the Vandana Global Ltd. judgment should not apply. The appellant relied on various judgments including those of the Supreme Court and High Courts to support their case for Cenvat credit.

On the other hand, the Revenue contended that the steel items were neither inputs nor capital goods, hence not eligible for Cenvat credit. They referred to the Saraswati Sugar Mills case to support their argument.

After considering both sides' submissions and the legal precedents, the Member (Judicial) found that the goods in question were explicitly included in the input definition before the 2009 amendment. The Member distinguished the Saraswati Sugar Mills case and noted that the judgments cited by the appellant supported their claim for Cenvat credit. Therefore, the Member concluded that the appellant was entitled to the Cenvat credit for HR sheets and MS plates. The impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the Cenvat credit for the steel items used in the construction of steel structures for plant and machinery installation, based on the interpretation of the retrospective effect of the 2009 amendment and the applicability of relevant judicial precedents.