2017 (9) TMI 920 - AT - Central Excise

CENVAT credit - welding electrodes - Held that - following the decision in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI , the CENVAT credit on welding electrodes allowed. CENVAT credit - MS Angles, MS Channels and Steel Plates etc - Held that - allowability for fabrication of supporting structures and foundation etc. have been held to be allowable by Hon ble Madras High Court in the case of India Cement Ltd. 2014 (7) TMI 881 - MADRAS HIGH COURT - CENVAT credit on MS angles/ channel allowed. CENVAT credit - Joist and TOR Steel - Held that - It is stated that Joist have been used in staging of Juice Sulphiter, Juice weighing scale and sugar beater. Joist have been uses as supporting structure of equipment in the factory of production but, not used in civil work admittedly. I hold that joist etc. also qualifies for Cenvat credit - Cenvat credit on MS rods/Jointing sheet, MS Channels, etc. used for erection of capital goods that is fabrication of structural to support various machines like crusher, kiln, hoppers, etc. is available, as without such structural support, machinery could not be erected and would not function - The other item TMT Flats bars is also held qualified for Cenvat credit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Allowability of Cenvat credit on various items like Steel Plates, Angles, Channel, Joists, TMT flat bars, Tor Steels, Ms Flats, Packing, Jointing Sheet, Steam Metallic Packing, Jointing Gasket Sheet, Aluminum Sheet, Bagasse Carrier Chain, Forged Chain, and Welding Electrodes.

Analysis:

1. The appeal involved the allowability of Cenvat credit on multiple items used by a sugar mill for production. The Revenue disputed the credit on various items, including Welding Electrodes, Angles, Channels, Joists, and more. The Larger Bench rulings were cited to support the disallowance of credit on Welding Electrodes. However, the respondent argued that these items were essential for production, repair, and maintenance of plant machinery, citing relevant case laws and precedents.

2. The first issue addressed was the allowability of Cenvat credit on Welding Electrodes. The respondent contended that these electrodes were crucial for production, repair, and maintenance of plant machinery, supported by relevant case laws. The Tribunal held that Cenvat credit on Welding Electrodes was allowable based on precedents and practical necessity for production.

3. The next set of items in dispute were MS Angles, MS Channels, and Steel Plates. The respondent explained the specific usage of these items in enhancing capacity, modification of equipment, and supporting structures, qualifying them as capital goods for Cenvat credit. The Tribunal referenced a High Court ruling to support the allowability of credit on these items as inputs.

4. The issue regarding Joists and TOR Steel was addressed next. These items were used in staging and supporting equipment in the production facility but not for civil work. The Tribunal held that these items qualified for Cenvat credit based on precedents and necessity for supporting machinery.

5. Other items like TMT Flat bars, MS Flats, Aluminum Sheet, Bagasse Carrier Chain, Forged Chain, Jointing Gasket Sheet, and Steam Metallic Packing were also considered for Cenvat credit eligibility. The Tribunal referenced various rulings to support the allowability of credit on these items, emphasizing their essential role in production and machinery support.

6. The Tribunal concluded that the respondent had rightfully taken Cenvat credit on the disputed items based on the detailed analysis and findings provided. The appeal filed by the Revenue was dismissed, and the respondent was entitled to consequential benefits as per the law.