2019 (4) TMI 644 - AT - Central Excise

CENVAT Credit - capital goods - items used for fabrication of structural items which are embedded to the earth - Held that - The impugned goods have been used for fabrication of supporting components of capital goods. Further, the appellants have furnished the Chartered Engineer certificate regarding the usage of the said goods. Also it is found that the said goods have not been used for laying foundation for the capital goods. This issue regarding the cenvat credit on various machinery is squarely covered in favour of the appellant by the decision of the Division Bench of the Tribunal in the case of Monnet Ispat & Energy Ltd. 2016 (1) TMI 917 - CESTAT NEW DELHI wherein identical goods were involved on which cenvat credit was denied. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against rejection of cenvat credit on items used for fabrication of structural items embedded to the earth.

Analysis:
1. Issue of Admissibility of Cenvat Credit: The appeal was filed challenging the rejection of cenvat credit amounting to Rupees 1,14,770/- for the period August 2009, availed on items used for fabrication of structural items embedded to the earth. The original authority allowed cenvat credit of Rupees 10,59,961/- but disallowed the remaining amount, ordering its recovery under Rule 14 along with interest and penalty under Rule 15(2) of Cenvat Credit Rules, 2004.

2. Contentions of the Appellant: The appellant argued that the impugned order failed to appreciate the facts and law properly. They contended that the impugned goods were used for fabrication of supporting components of capital goods, essential for the functioning of main capital goods. The appellant highlighted that they did not avail credit on cement and TMT bars used for bedding and supporting structures. They also submitted a Chartered Engineer certificate certifying the usage of the impugned goods and relied on a Tribunal decision in a similar case.

3. Arguments of the Respondent: The learned AR defended the impugned order without providing specific details or arguments to counter the appellant's contentions.

4. Judicial Analysis and Decision: After hearing both parties and examining the records, the Tribunal found that the impugned goods were used for fabrication of supporting components of capital goods, supported by a Chartered Engineer certificate. The Tribunal noted that the goods were not used for laying the foundation of capital goods. Relying on a Division Bench decision, the Tribunal held that the denial of cenvat credit on similar machinery was not sustainable. The Tribunal referred to various case laws supporting the eligibility of items like MS plates, angles, channels, etc., for cenvat credit as components of capital goods. Applying these principles, the Tribunal set aside the impugned order, allowing the appeal of the appellant with consequential relief.

5. Conclusion: The Tribunal's decision was based on a thorough analysis of the facts, legal provisions, and relevant case laws, ultimately leading to the allowance of the appellant's appeal against the rejection of cenvat credit on items used for fabrication of structural items embedded to the earth.