2018 (2) TMI 905 - AT - Central Excise

CENVAT credit - MS sheets, angles, channels, MS plates etc. - denial on the ground that they are being used as supporting structurals, which cannot be held to be Cenvatable after the insertion of explanation 2 to Rule 2(k) of CCR 2004 - Held that - Reference can be made to Hon ble Gujarat High Court s decision in the case of Mundra Ports & Special Economic Zone Ltd. v. CCE & Cus. 2015 (5) TMI 663 - GUJARAT HIGH COURT , where it was held that plain reading of the definition of Rule 2(k) would demonstrate that all the goods used in relation to manufacturer of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for CENVAT credit - we deem it fit to set aside the impugned order and remand the matter to original adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
1. Denial of Cenvat credit for MS sheets, angles, channels, plates, etc., used as supporting structurals.
2. Denial of Cenvat credit for welding electrodes used for repair and maintenance.

Analysis:

Issue 1: Denial of Cenvat credit for supporting structurals
The main issue in this case revolved around the denial of Cenvat credit to the appellant for items like MS sheets, angles, channels, and plates being used as supporting structurals. The denial was based on the insertion of explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2005. However, the Tribunal noted that the issue has been decided in favor of the assessee in a previous decision by the Hon'ble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd. v. CCE & Cus. The Tribunal also mentioned the disagreement with a decision by the larger Bench in the case of Vandana Global Ltd. v. CCE, Raipur. Due to the absence of the appellant's representative, the Tribunal decided to set aside the impugned order and remand the matter to the original adjudicating authority for a fresh decision based on precedent decisions of higher courts.

Issue 2: Denial of Cenvat credit for welding electrodes
The second issue involved the denial of Cenvat credit for welding electrodes used for repair and maintenance in the appellant's factory. The Tribunal highlighted that there are several decisions of Hon'ble High Courts that have been consistently followed by the Tribunal in similar cases. As the appellant's representative was absent, the Tribunal decided to remand the matter to the original adjudicating authority for a fresh decision, ensuring that the appellant would have the opportunity to present their case before the authority.

In conclusion, the Tribunal's judgment in this case focused on the denial of Cenvat credit for specific items and highlighted the importance of following precedent decisions of higher courts. The decision to remand the matter to the original adjudicating authority was made to ensure a fair consideration of the appellant's case in light of established legal principles.