2017 (12) TMI 703 - AT - Central Excise

CENVAT credit - MS angels, plates, channels, joists, etc. which were used for fabrication and erection of structures which are embedded to earth - Held that - this issue has been considered by the Madras High Court in the case of India Cements Ltd. 2015 (3) TMI 661 - MADRAS HIGH COURT , wherein it has been held that the assesse is entitled to avail CCR on various iron and steel items which are used as components for capital goods or for structure support of capital goods which is embedded to earth and thus becoming immovable property - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of cenvat credit on MS angels, plates, channels, joists used for fabrication and erection of structures embedded to earth.

Analysis:
The appeal was filed against the Commissioner (A)'s order rejecting the appellant's appeal regarding the denial of cenvat credit on certain items used for fabrication and erection of structures embedded to earth. The appellant, engaged in the manufacture of sponge iron, availed cenvat credit on MS angels, plates, channels, joists, etc. The lower authority proposed to deny the credit, demand interest, and impose a penalty as these items were deemed irregular for cenvat credit. The appellant argued that the impugned order contradicted binding judicial precedents and went beyond the scope of the show cause notice. The appellant relied on various decisions to support their claim, emphasizing that the eligibility of credit should be determined before items become immovable property. Additionally, the appellant cited cases where credit on similar iron and steel items was allowed. The Learned AR supported the findings of the impugned order.

The judicial member, after considering submissions and referenced judgments, noted that the Madras High Court had ruled in a similar case that the appellant was entitled to avail cenvat credit on iron and steel items used as components for capital goods or for supporting capital goods embedded to earth. Relying on this precedent and other relevant decisions, the judicial member concluded that the impugned order was not sustainable in law. Consequently, the appeal of the appellant was allowed, and the impugned order was set aside.

In conclusion, the appellate tribunal ruled in favor of the appellant, allowing the cenvat credit on the items in question used for fabrication and erection of structures embedded to earth. The decision was based on established legal principles and previous judgments supporting the appellant's claim for cenvat credit eligibility.