2017 (12) TMI 428 - AT - Central Excise

CENVAT credit - inputs/capital goods - MS sheets, plates, joist, angles, channels etc. which were used for manufacture/installation of molasses tanks/boilers - Held that - appellant is entitled to take Cenvat Credit on these inputs used in fabrication of capital goods - Similar view have been taken in CBEC Circular No.964/07/2012 CX dated 02.04.2012 - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat Credit on various items used for manufacture/installation of molasses tanks and boilers.

Analysis:
The appellant, a manufacturer of sugar and molasses, appealed against the denial of Cenvat Credit on items like MS sheets, plates, joist, channels, etc., used for manufacturing/installation of molasses tanks and boilers. The Adjudicating Authority contended that Cenvat Credit was not admissible on these items as they were neither capital goods nor inputs. The appellant argued that these steel items were used in making/fabricating structural supports of various machinery, which were capital goods further used in the manufacturing process. The appellant relied on various decisions and CBEC Circulars to support their contention.

The learned AR opposed the appellant's contention and relied on different judicial decisions to support their argument. The Tribunal observed that the steel items were used for fabricating capital goods of the sugar factory, such as cane carrier, juice clarifier house, molasses storage tanks, etc. The Tribunal distinguished the facts of previous cases cited by both parties, emphasizing that in the present case, the steel items were components and accessories of capital goods, not immovable assets embedded to earth.

The Tribunal further noted that the appellant was entitled to Cenvat Credit on the items used in the fabrication of capital goods, as per CBEC Circulars. It was held that the appellant could avail Cenvat Credit on inputs used in the fabrication of capital goods like shape and sections, plates, hot strips, HR Plates, Angles, Channels, Joints, etc. The Tribunal set aside the impugned order, allowing the appeal and granting the appellant consequential benefits.

In conclusion, the Tribunal ruled in favor of the appellant, holding that they were entitled to Cenvat Credit on the items in question used for the fabrication of capital goods, based on the specific facts and legal interpretations presented during the proceedings.