2018 (2) TMI 275 - AT - Central Excise

CENVAT credit - MS structures, HR plates, angles, channels, beams, etc - Held that - the appeal filed by the Revenue is now contradicting the factual matrix of the utilization of these items in the manufacture of rolling mill machinery and its accessories as, I find from the grounds of appeal the Revenue is not disputing the certificate issued by the Chartered Engineer which was produced before the first appellate authority - First appellate authority has held that Since the said Rolling Mill Machinery & its Accessories are classifiable under Chapter 82, 84, 85 and 90 of CETA, 1985 and covered under Rule 2(a) as Capital goods, consequently the goods used in the manufacture of said Rolling Mill Machinery are also squarely covered under the definition of Capital Goods in terms of Rule 2(a)(A)(i) and (iii) of the CCR, 2004 - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Eligibility to avail CENVAT credit on MS structures, HR plates, angles, channels, beams, etc.

Analysis:
The appeal revolved around the eligibility of the appellant to avail CENVAT credit on specific items used in manufacturing. The adjudicating authority had initially concluded that the CENVAT credit availed was incorrect and needed to be reversed. However, the first appellate authority overturned this decision after considering a certificate from a Chartered Engineer regarding the usage of the items in rolling mill machinery manufacture for excisable goods. The first appellate authority relied on tribunal decisions to support its ruling.

The learned Authorised Representative argued that the items were used for construction of supporting structures, making them ineligible for CENVAT credit. He referenced previous tribunal decisions and Rule 2(k) of CENVAT Credit Rules, 2004, which excludes items for construction activity. However, the appellate judge noted that the Revenue's appeal contradicted the factual utilization of the items in manufacturing rolling mill machinery. The Revenue did not dispute the Chartered Engineer's certificate, which confirmed the items' usage in the factory for manufacturing machinery.

The first appellate authority's detailed findings emphasized the essential role of the disputed goods in manufacturing rolling mill machinery and its accessories, which were used in the production of excisable goods. The authority highlighted that the machinery and accessories were classified as capital goods under relevant rules. The judge cited previous decisions supporting the eligibility of items like MS plates, channels, beams, and HR coils for CENVAT credit when used in fabricating capital goods. The judge ultimately upheld the impugned order, rejecting the Revenue's appeal.

In conclusion, the judgment affirmed the appellant's eligibility for CENVAT credit on the mentioned items due to their integral role in manufacturing capital goods for excisable products. The decision was supported by the Chartered Engineer's certificate and previous tribunal rulings, emphasizing the correct application of CENVAT Credit Rules, 2004.