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2018 (5) TMI 86 - AT - Central ExciseCENVAT credit - Coils, Plates, HR Sheets, MS Angles, Channels, Beams etc. for construction/ fabrication of structural/ foundation of machinery within the factory premises - Held that - the issue settled by the decision in the case of Singhal Enterprises Pvt. Ltd. Vs. Commissioner of Central Excise & Customs, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI , where it was held that applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit - credit allowed. CENVAT credit - excess amount of duty paid - the education cess and Secondary Higher Education cess which was not payable but paid - Held that - the issue is covered by the judgment of Bombay High Court in Nestle India Ltd. s case 2011 (6) TMI 164 - BOMBAY HIGH COURT , where it was held that he payment of excise duty must be treated as valid, therefore, the claim of Modvat credit must be treated as excise duty validly paid - credit allowed. Appeal allowed - decided in favor of appellant.
Issues involved:
1. Entitlement to total CENVAT Credit 2. Denial of credit on duty paid on captively consumed white cream 3. Denial of credit on education cess and secondary higher education cess 4. Denial of credit on MS Angles, Channels, beams used for fabrication 5. Admissibility of credit on structural items for machinery fabrication Issue 1: Entitlement to total CENVAT Credit The appeal concerns the entitlement of the Appellant to total CENVAT Credit of ?2,29,586. The credit was denied in part: ?82,346 for excess credit on captively consumed white cream, ?50,688 for education cess and secondary higher education cess on sugar cess, and ?96,552 on MS Angles, Channels, beams used for fabrication. The Appellant argued that denial of credit on the duty paid was contrary to established legal principles as per Tribunal and High Court cases. They referred to specific judgments to support their claim, asserting eligibility for credit as per the prescribed definition of "input." Issue 2: Denial of credit on duty paid on captively consumed white cream The denial of credit on duty paid on captively consumed white cream was challenged by the Appellant, citing previous Tribunal and High Court cases to support their claim that such duty was not required to be paid. The Appellant contended that the denial of credit was against established legal principles, leading to the appeal against the Commissioner's decision. Issue 3: Denial of credit on education cess and secondary higher education cess The denial of credit on education cess and secondary higher education cess, paid on sugar cess, was another point of contention. The Appellant argued that these cess amounts were not payable, and thus, the denial of credit was unjustified. They relied on legal precedents to support their position and emphasized the eligibility of such items for credit as per the defined criteria. Issue 4: Denial of credit on MS Angles, Channels, beams used for fabrication The denial of credit on MS Angles, Channels, beams used for fabrication of structural items within the factory premises was challenged by the Appellant. They argued that these items met the definition of "input" under the relevant rules and should be eligible for credit. The Appellant referenced a specific judgment to bolster their argument regarding the admissibility of credit on these items. Issue 5: Admissibility of credit on structural items for machinery fabrication The admissibility of credit on structural items, such as MS Angles, Channels, Beams, for construction and fabrication of machinery within the factory premises was a key aspect of the appeal. The Tribunal considered relevant legal interpretations and precedents, including a detailed analysis of a specific case, to determine the eligibility of such items for CENVAT credit. The Tribunal concluded that the Appellant was entitled to credit on these structural items based on the established legal principles and the application of the "user test" to ascertain their classification as capital goods. In conclusion, the Tribunal, led by Dr. D.M. Misra, ruled in favor of the Appellant on all the issues raised in the appeal. The judgment highlighted the applicability of legal precedents, including specific cases and interpretations, to support the decision to allow the CENVAT credit on duty paid on MS Angles, Channels, Beams used for fabrication, and to overturn the denials related to captively consumed white cream and education cess amounts. The ruling provided consequential relief to the Appellant in line with the law, ultimately setting aside the impugned order and allowing the appeal.
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