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2017 (12) TMI 484 - AT - Central ExciseCENVAT credit - capital goods - certain items of Iron & Steel etc - Held that - the issue herein is squarely covered in favour of the appellant as held by Hon ble Madras High Court in appellant s own case M/s. India Cements Ltd. Versus The Custom, Excise and Service Tax & The Commissioner of Central Excise 2015 (3) TMI 661 - MADRAS HIGH COURT , where it was held that on items like MS Rod, MS sheet, MS channels, MS plate, etc. used for erection of capital goods and used for fabrication of structural to support various machines like crusher kiln hopper etc. without which such a structural machinery could not be erected and would not function, which fact is not disputed, and credit remains allowed - credit allowed - appeal allowed - decided in favor of appellant.
Issues involved:
Availability of Cenvat Credit on certain items of Iron & Steel used in the production of cement. Analysis: The appeal pertains to the availability of Cenvat Credit on specific items of Iron & Steel used by the appellant in the production of cement at their factory. The appellant had availed Cenvat Credit amounting to ?19,01,000 on various goods such as Grating MS, Angle MS, Sleeve H-315, and others, used in the construction of the factory shed, building, and laying of foundations. The Revenue contended that these items did not qualify as capital goods or inputs under the Cenvat Credit Rules, 2004, and proposed to disallow the credit. The Original Adjudicating Authority confirmed a reduced amount of ?1,33,609 as inadmissible credit and imposed a penalty. The appellant challenged this decision before the Ld. Commissioner (Appeals), who upheld the order-in-original, stating that the materials in question were not capital goods as defined in the Rules and were used for maintenance and repair of plant and machinery, hence not eligible for credit. In the appeal before the Tribunal, the appellant relied on previous judgments of the Hon'ble Madras High Court, wherein it was held that items like MS Rod, MS sheet, MS channels, etc., used for erection of capital goods and fabrication of structures to support machinery were eligible for Cenvat credit. The appellant argued that these items were essential for the functioning of machinery and, therefore, qualified as capital goods under the Cenvat Credit Rules, 2004. The Tribunal noted the precedents set by the Madras High Court in the appellant's own case and allowed the appeal, setting aside the disallowance of Cenvat credit and penalty. The appellant was granted consequential benefits in accordance with the law. In conclusion, the Tribunal ruled in favor of the appellant, holding that the items in question qualified as capital goods under the Cenvat Credit Rules, 2004, based on the precedents established by the Hon'ble Madras High Court. The appellant was entitled to avail Cenvat credit on the disputed items used in the production process of cement, and the disallowance of credit and penalty imposed by the Revenue were set aside.
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