2017 (10) TMI 845 - AT - Central Excise

CENVAT credit - H.R.Coils, H.R. Sheets, M.S. Plates etc. - denial of credit on the ground that these items were structural items ordinarily used for civil construction or construction of factory shed - Held that - the Commissioner (Appeals) proceeded on the basis of the Chartered Engineer s Certificate and followed the user test - Revenue have not countered such evidence in their grounds of appeal except reference of case laws - appeal dismissed - decided against Revenue.

Summary

Issues:
Admissibility of Cenvat Credit on certain items used in manufacturing under Chapter 72 of CETA, 1985.

Analysis:
The case involved the denial of Cenvat Credit on H.R. Coils, H.R. Sheets, M.S. Plates, etc., by the Adjudicating Authority, claiming these items were typically used for civil construction or factory shed construction. The Commissioner (Appeals) overturned the denial, prompting the Revenue to appeal to the Tribunal.

The Revenue argued that a Chartered Engineer's report demonstrated the manufactured goods were installed with nuts and bolts, but cited case laws where similar items were considered structural and not eligible for credit. The Commissioner (Appeals) considered various evidence, including the Engineer's certificate and field verification reports, to determine the admissibility of credit and extent thereof.

The Commissioner found that the inputs were used in fabricating capital goods like Bag Filters, Crusher Houses, Tubes, Pipes, and Fittings for different divisions within the factory. The lower authority contended that the inputs did not meet the definition of capital goods under the CETA, 1985. However, the Commissioner, based on the Engineer's certificate and relevant rules, concluded that the parts of pollution control equipment qualified as capital goods.

Referring to Rule 2(a)(A) of the Rules, the Commissioner determined that the inputs used for pollution control equipment and related items were indeed capital goods. The Commissioner also highlighted the amendment to Rule 2(k) and a CBEC Circular clarifying the availability of credit on inputs used in manufacturing capital goods.

The Commissioner relied on the user test and previous Tribunal judgments to support the decision. The Tribunal upheld the Commissioner's order, noting the lack of evidence counteracting the Engineer's certificate and user test. Consequently, the Revenue's appeal was dismissed.

In conclusion, the Tribunal's decision affirmed the Commissioner (Appeals)'s ruling, emphasizing the importance of evidence, relevant rules, and established legal principles in determining the admissibility of Cenvat Credit on items used in manufacturing under Chapter 72 of CETA, 1985.