2017 (12) TMI 272 - AT - Central Excise

CENVAT credit - steel items - supporting structure for the capital goods - Held that - items used for fabrication of supporting structure cannot be called components, the credit of duty paid cannot be allowed - with effect from 07.07.2009 the definition of input appearing in Rule 2(k) of the Cenvat Credit Rules, 2004 has been amended and it specifically excludes cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods from the ambit of definition of inputs - credit cannot be allowed - decided against assessee.

Summary

Issues:
Appeal against demand of reversal of cenvat credit on steel items used for supporting capital goods.

Analysis:
The appellant filed an appeal against the demand for reversal of cenvat credit taken on steel items used as a structure to support capital goods. The appellant relied on the apex court judgment in Rajasthan Spg & Weaving Mills and the decision of the Tribunal in APP Mills Ltd. The ld. AR for the appellant relied on the impugned order and also cited the decision of the Tribunal in Vandana Global Ltd. and the apex court judgment in Saraswati Sugar Mills. The Tribunal noted that since nobody appeared for the respondent and the matter was covered by the apex court decision, it was taken for final disposal.

The Tribunal observed that the apex court judgment in Rajasthan Spg & Weaving Mills, relied upon by the appellant, was not related to structural material for supporting capital goods but for a chimney in a factory. The Tribunal found that the steel items used by the appellants as supporting structures for capital goods did not qualify as component parts based on the apex court's finding in Saraswati Sugar Mills. The Tribunal cited the apex court's view that iron and steel structures are not essential requirements in a manufacturing unit and are not considered component parts. Additionally, the definition of 'input' under the Cenvat Credit Rules, 2004 was amended to exclude items used for construction of factory shed, building, or support structures for capital goods from the definition of inputs.

Based on the above analysis, the Tribunal concluded that items used for the fabrication of supporting structures cannot be considered components, and therefore, the credit of duty paid cannot be allowed. The Tribunal dismissed the appeal, finding no merit in it. The judgment was pronounced in court on 23/10/17.