2018 (7) TMI 408 - AT - Central Excise

CENVAT Credit - Angle, Channel, CTB Bars, Cement, Welding Electrode etc. - Held that - In the case of the Commissioner of Central Excise and Customs Vs. SMC Power Generation Limited, the appellant s own case, 2017 (8) TMI 1402 - CESTAT KOLKATA , the Tribunal dismissed the appeal filed by the Revenue by holding that The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944 - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Irregular availment of Cenvat Credit on specific items
- Denial of Cenvat Credit by Adjudicating authority
- Appeal filed by Revenue against Commissioner (Appeals) Order

Analysis:
1. The case involved the Assessee engaged in manufacturing Sponge Iron under Chapter 72 of the Central Excise Tariff Act, 1985. Show Cause Notices were issued for irregular availment of Cenvat Credit on various items from November 2005 to August 2009. The Adjudicating authority confirmed the recovery of Cenvat Credit and imposed penalties. The Commissioner (Appeals) set aside the denial of credit on certain items, leading the Revenue to file an appeal.

2. The Revenue contended that Cenvat Credit should not be allowed on items like Cement and structural steel items based on previous Tribunal decisions. However, the impugned Order revealed discrepancies where items were used for machinery parts rather than support structures. The Revenue did not contest the use of items, and the Learned Counsel cited relevant decisions to support their argument.

3. The judgment referred to various cases and highlighted the importance of the 'user test' in determining whether goods qualify as capital goods for Cenvat Credit. The Tribunal emphasized that structural items used in fabrication for supporting machinery parts should be considered capital goods, aligning with Rule 2(a) of the Cenvat Credit Rules. The decision in the appellant's own case supported the allowance of Cenvat Credit for such items, leading to the dismissal of the Revenue's appeal.

4. Ultimately, the Tribunal upheld the impugned order based on the 'user test' principle, concluding that the structural items used for machinery support fell within the ambit of capital goods eligible for Cenvat Credit. Following the precedent set in the appellant's case, the appeal filed by the Revenue was dismissed, affirming the decision of the Commissioner (Appeals).