2019 (2) TMI 6 - AT - Central Excise

CENVAT Credit - inputs - H.R. Plates/M.S. Plates/S.S. Plates/Cheq. Plates - Held that - Larger Bench of CESTAT, New Delhi reported in M/S. MANGLAM CEMENT LTD. VERSUS C.C.E., JAIPUR-I 2018 (3) TMI 1547 - CESTAT NEW DELHI held that input on steel items used as support structure for smooth erection of machines can be considered as accessories of capital goods and those are eligible to get benefit of CENVAT credit as they fall within the scope and ambit of both Rule 2(a)(A) as well as 2(k) of the CENVAT Credit Rules, 2004 - thus, availment of CENVAT credit by the appellant on MS Plates, Steel Plates etc. which were used either as capital goods or as support structure or even for repair and maintenance activities of the manufacturing unit are admissible CENVAT credits which were rightly availed by the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Admissibility of CENVAT credit on H.R. Plates/M.S. Plates/S.S. Plates/Cheq. Plates falling under Chapter 72.

Analysis:
1. The issue litigated up to the Tribunal stage concerns the admissibility of CENVAT credit on specific plates, contested by the appellant but denied by the respondent and confirmed in previous orders.

2. The appellant availed CENVAT credit against the purchase of plates for utility services related to machine operation. The appellant argued that the plates were used for various purposes such as storing acid, protecting furnace parts, and repairing machines, qualifying as 'inputs' under CENVAT Credit Rules, 2004.

3. The appellant contended that the plates were used for making structures supporting capital goods, citing case laws. The Commissioner (Appeals) found that these structures did not qualify as inputs post-2011, excluding supporting structures. However, the appellant argued that the plates were essential for machine functioning, making them eligible for CENVAT credit.

4. The respondent argued that supporting structures are not components of capital goods, referencing judgments. They maintained that supporting structures are not essential in a manufacturing unit, supporting the Commissioner (Appeals) decision.

5. After reviewing the arguments and case records, it was found that the plates were used for various purposes in the manufacturing unit. The Tribunal considered the plates as eligible inputs based on their role in supporting machines, repair activities, and smooth functioning, aligning with CENVAT Credit Rules. The Tribunal differentiated the case from precedents involving sugar manufacturing units, ruling in favor of the appellant.

Order:
The Tribunal allowed the appeal, setting aside the order passed by the Commissioner of GST & Central Excise (Appeals), Nagpur. The decision was pronounced in court on 25.01.2019.