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2017 (9) TMI 1552 - AT - Central ExciseCENVAT credit - transmission tower materials - structural parts of the boiler - Held that - Revenue strongly relied upon the decision of the Tribunal in the case of Commr. of Central Excise & Customs, BBSR Vs. Shyam DRI Power 2007 (10) TMI 120 - CESTAT, KOLKATA , wherein it has been held that tower materials are not eligible for Cenvat Credit as they are used for transmission of electricity and not for manufacturing parts and components - on eligibility of the Cenvat Credit on transmission tower materials is required to be examined in the light of the said decision. Cenvat Credit on structural support - Held that - the present matter should be looked into after considering the applicability of the larger Bench decision and other decisions as referred by the Ld. Counsel for the assessee and use of the items in the manufacture of the final products. Appeal allowed by way of remand.
Issues:
- Admissibility of CENVAT Credit on transmission tower materials - Admissibility of CENVAT Credit on structural support Analysis: Issue 1: Admissibility of CENVAT Credit on transmission tower materials The case involved M/s. Hindalco Industries Ltd., engaged in manufacturing aluminium and carbon electrodes paste. The Adjudicating Authority partially allowed CENVAT Credit but confirmed the demand for the balance amount and imposed a penalty. The Commissioner (Appeals) allowed CENVAT Credit on transmission tower materials, stating that essential components like foundation bolts and nuts are eligible for credit. However, CENVAT Credit on structural support was deemed inadmissible as they were not considered usable in or in relation to the manufacture of final products. The appellant and the Revenue both appealed the decision. During the hearing, the appellant's counsel cited various decisions and circulars supporting the admissibility of CENVAT Credit on tower materials. The Revenue, on the other hand, relied on a Tribunal decision stating that tower materials are not eligible for credit as they are used for electricity transmission, not manufacturing. Reference was made to a Bombay High Court decision on a similar issue, emphasizing that tower parts were considered immovable property, thus not entitling the assessee to credit. The Tribunal found the need to examine the eligibility of CENVAT Credit on transmission tower materials in light of these decisions. Issue 2: Admissibility of CENVAT Credit on structural support Regarding the appeal on the admissibility of CENVAT Credit on structural support, the Commissioner (Appeals) noted that credit was claimed on support structures like platforms, stairs, handrails, and duct support structures, which were deemed non-participatory in the manufacturing process. The appellant's counsel referred to various case laws, while the Revenue pointed to a larger Bench decision of the Tribunal in a different case. An appeal against this larger Bench decision was admitted by the Chattisgarh High Court, indicating the need to consider its applicability in the present matter. The usage of these items in manufacturing final products was also highlighted. In the Tribunal's view, the eligibility of CENVAT Credit for the items in question required further examination based on their use and the relevant case laws cited by both parties. Consequently, the matter was remanded to the Adjudicating Authority for a fresh decision, emphasizing the necessity of providing the appellant with a fair hearing before reaching a new conclusion. Both appeals filed by the Revenue and the assessee were allowed for remand, indicating a need for a reevaluation of the CENVAT Credit eligibility based on the observations made. This comprehensive analysis of the judgment highlights the intricacies of the issues surrounding the admissibility of CENVAT Credit on transmission tower materials and structural support, emphasizing the importance of legal precedents and case laws in determining the final decision.
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