2018 (3) TMI 914 - AT - Central Excise

CENVAT credit - HR coils, MS Channels, Nickel Chromium Austenitic - these items were used for fabrication and erection of structural items - Held that - both the authorities have consistently held that the assessee is entitled to cenvat credit relying upon various decisions of the Tribunal including the decision of the Karnataka High Court in the case of CCE, Bangalore Vs. SLR Steels Ltd. 2012 (9) TMI 169 - KARNATAKA HIGH COURT , where it was held that Once a storage tank and pollution control equipment constitutes capital goods and any raw material purchased for construction of those goods, the duty paid could be utilized as a CENVAT credit by the assessee notwithstanding the fact that the storage tank is an immovable property - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against rejection of cenvat credit on certain items used in fabrication.
- Entitlement to cenvat credit on MS Channels, MS Rounds, MS Angles.
- Application of User Test for classifying goods as capital goods.
- Reliance on various decisions of the Tribunal and High Court.

Analysis:
The appeal was filed by the Revenue challenging the order passed by the Commissioner (Appeals) rejecting the appeal of the Department and upholding the Order-in-Original. The respondents, engaged in manufacturing Maize Starch, Maize Gluten & Maize Fiber, availed cenvat credit on HR coils, MS Channels, Nickel Chromium Austenitic used in fabrication of structural items. The Revenue contended that the assessee was not entitled to cenvat credit on certain items as they did not qualify as inputs or capital goods. The Revenue argued that the impugned order did not consider the facts and law properly and wrongly relied on precedent cases. The Tribunal considered the grounds of appeal by the Revenue and found that both lower authorities had consistently held the assessee entitled to cenvat credit based on various decisions, including those of the Karnataka High Court and the Apex Court. The Tribunal also referred to the User Test for classifying goods as capital goods, emphasizing the necessity of structural items in supporting and facilitating the functioning of capital goods. Based on the precedent cases and the User Test, the Tribunal upheld the impugned order, dismissing the appeal of the Revenue.

In conclusion, the Tribunal found no infirmity in the impugned order as it was based on various decisions applicable to the facts of the case. The Tribunal upheld the decision of the lower authorities, emphasizing the eligibility of the assessee for cenvat credit on the items in question. The reliance on precedent cases, including those of the High Court and the Apex Court, supported the Tribunal's decision to dismiss the Revenue's appeal.