2017 (8) TMI 260 - AT - Central Excise

CENVAT credit - capital goods - M.S. Channels, M.S. Angles, M.S. Sheets, Plates, TMT Bars, SS Bars etc. used in the fabrication of machineries and structures - Held that - credit on M.S. Angles, Channels, Beams etc. used in the fabrication of capital goods as well as structure used as support for capital goods, supported by the evidence of Chartered Engineers Certificate, are eligible to CENVAT credit - similar issue decided in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI , where it was held that applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the CENVAT Credit - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility of CENVAT credit on structural steel items used in the fabrication of capital goods and structures.

Analysis:
The appeal was filed against an order passed by the Commissioner (Appeals) regarding the eligibility of CENVAT credit on various structural steel items like M.S. Angles, Channels, Beams, etc., used in the fabrication of machineries and structures. The appellant claimed that these items were essential for the fabrication of capital goods and hence eligible for credit under Rule 2(a)/2(k) of CCR, 2004. The appellant cited judgments from the Hon'ble Supreme Court and High Courts to support their argument. The Revenue, represented by the Ld. AR, supported the findings of the Commissioner (Appeals).

Upon hearing both sides and examining the records, the Tribunal found that the dispute revolved around the eligibility of CENVAT credit on the mentioned structural steel items used in the fabrication of capital goods and structures. The Tribunal referred to a decision by the Principal Bench at Delhi in a similar case and analyzed various judgments and legal provisions. The Tribunal noted that the user test, as established by previous judgments, was crucial in determining whether certain goods could be classified as capital goods. Applying the user test to the case at hand, the Tribunal concluded that the structural items used in the fabrication of support structures for capital goods fell within the definition of 'Capital Goods' under Rule 2(a) of the Cenvat Credit Rules, making them eligible for CENVAT credit.

Based on the above analysis, the Tribunal held that the credit on M.S. Angles, Channels, Beams, etc., used in the fabrication of capital goods and structures, supported by Chartered Engineers' Certificate, was indeed eligible for CENVAT credit. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law.