2019 (1) TMI 617 - AT - Central Excise

CENVAT Credit - inputs/capital goods - MS plates, HR sheets, angles, channels, beams, joists and MS flats falling under Chapter 72 were used as inputs for fabrication of bunkers - Held that - This issue has been settled in favour of the appellant by various decisions wherein it has been held that the availment of credit on various items of iron and steel which are used in fabrication of storage tanks/bunkers are held to be inputs and the assessee is entitled to CENVAT credit of the same - reliance placed in the case of Suguna Metals Pvt. Ltd. vs. CCE, Hyderabad-I 2016 (1) TMI 1167 - CESTAT HYDERABAD - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of CENVAT credit on iron and steel items used in fabrication of bunkers

Analysis:
The appeal was directed against the Commissioner (A)'s order rejecting the appellant's appeal regarding the denial of CENVAT credit on iron and steel items used in the fabrication of bunkers. The appellant, engaged in the manufacture of sponge iron, had wrongly availed CENVAT credit on various iron and steel items used in the fabrication of bunkers. The Deputy Commissioner disallowed the credit and ordered recovery along with interest and penalty. The appellant's appeal before the Commissioner (A) was also rejected.

The appellant argued that the impugned order was unsustainable as it did not properly appreciate the facts and law. The counsel contended that the bunkers should be considered as capital goods and that the impugned order went beyond the allegations in the show-cause notice. The appellant cited various decisions to support their argument, highlighting that the issue had been settled in favor of the appellant in similar cases.

The appellant further argued that the eligibility of credit should be decided before the goods become part of immovable property. They referenced decisions supporting their stance and emphasized that the issue of availing credit on iron and steel items for capital goods or supporting structures had been settled in favor of the appellant in previous cases.

After hearing both parties and considering the submissions along with the cited decisions, the Tribunal found in favor of the appellant. The Tribunal concluded that the denial of CENVAT credit on iron and steel items used in the fabrication of bunkers was not sustainable in law. Citing previous decisions, the Tribunal allowed the appeal of the appellant, setting aside the impugned order.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal and setting aside the order that rejected the CENVAT credit on iron and steel items used in the fabrication of bunkers. The decision was based on the settled issue in previous cases and the eligibility of credit before goods become part of immovable property.