2017 (10) TMI 327 - AT - Central Excise

CENVAT credit - M/s Channel, Angle, Beam, Structural Steel etc. used in fabrication of capital goods within the factory - Held that - the Principal Bench at Delhi in the case of Singhal Enterprises Pvt. Ltd 2016 (9) TMI 682 - CESTAT NEW DELHI has 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. The Appellant should establish the said use by adducing evidences - the matter is remanded to the adjudicating authority to examine the claim of the appellant on the eligibility of credit on the aforesaid items - appeal allowed by way of remand.

Summary

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

Analysis:
The appeal was filed against an order passed by the Commissioner (Appeals) Surat confirming a demand for recovery of a specific amount due to availing CENVAT credit on structural steel items used in the fabrication of capital goods within the factory. The appellant contended that these items were eligible for credit as per the definition of 'input' under Rule 2(k) of CCR, 2004, citing a judgment from the Principal Bench at Delhi. The appellant, however, did not provide a Chartered Engineer's Certificate to support their claim.

The Revenue argued that the appellant's claim lacked evidence, including the absence of a Chartered Engineer's Certificate, and suggested remanding the matter for further verification. The Tribunal referred to the judgment of the Principal Bench at Delhi in a similar case, emphasizing the 'user test' to determine whether the structural steel items used in fabrication should be considered capital goods. The Tribunal found merit in the Revenue's argument that the appellant needed to establish the use of the items with evidence.

As a result, the Tribunal remanded the matter to the adjudicating authority for a detailed examination of the appellant's claim regarding the eligibility of credit on the structural steel items. The appellant was given the opportunity to provide evidence, including a certificate from a Chartered Engineer, to support their case. The adjudicating authority was directed to decide the issue based on the legal principles established by the Tribunal in the referenced judgment. The appeal was allowed by way of remand, keeping all issues open for further consideration.