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2019 (4) TMI 1591 - AT - Central ExciseCENVAT Credit - inputs/capital goods - MS channels, angles, plates joists etc. which were used in manufacture/fabrication/maintenance of the capital goods in their factory - HELD THAT - This issue is no longer resintegra and has already been decided in favour of the appellant in their own case NAVBHARAT VENTRURES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD 2018 (3) TMI 840 - CESTAT HYDERABAD where it was held that these items are eligible for availment of CENVAT credit - credit allowed. Whether or not the materials in question have been used in or in relation to fabrication/maintenance of the capital goods? - HELD THAT - The Finance Department can show that the materials were received in their factory and they have been allotted to different divisions. Once these were allotted and sent to various divisions of repair and maintenance, it will be difficult to point out as to which angle used in the repair and in particular which has come from stock received from which invoice. Such one to one co-relation in my considered view is difficult except where the factory has sophisticated inventory management system to track each sheet of metal and each angle - thus, the appellant has satisfactorily shown that the materials in question were used in their factory for maintenance/repair of capital goods. Appeal allowed - decided in favor of appellant.
Issues:
1. Entitlement to CENVAT credit on MS channels, angles, plates, joists under Chapter 72 of CENVAT Credit Rules for maintenance of capital goods. 2. Proof required to establish the usage of materials for repair/maintenance of capital goods to claim CENVAT credit. Analysis: Issue 1: Entitlement to CENVAT Credit The appeal was filed against the order-in-appeal that initially allowed CENVAT credit on MS channels, angles, plates, joists used for maintenance of capital goods. The Revenue appealed against this decision, leading to the current appeal. The appellant argued that prior to 07.07.2009, materials used for fabrication and maintenance of capital goods were considered inputs. They cited various cases, including the Vandana Global Ltd case, to support their claim for CENVAT credit. The appellant contended that the issue had been settled through legal precedents, emphasizing their entitlement to the credit based on the High Court's decision in the CCE Vs Singhal Enterprises case. The bench acknowledged the legal history and precedent, ultimately ruling in favor of the appellant's entitlement to CENVAT credit on the materials in question. Issue 2: Proof of Usage for CENVAT Credit The Assistant Commissioner highlighted the requirement for the appellant to prove that the materials were indeed used for repair/maintenance of capital goods to claim CENVAT credit. The Range Officer's inquiry revealed a lack of definitive proof regarding the utilization of the materials as reported by the Manager (Works) of the appellant. The appellant, however, presented sheets from the Finance Department detailing the usage of materials, including specific invoice-wise information on where the materials were utilized. The appellant argued that these records substantiated their claim for CENVAT credit, disputing the Range Officer's findings. The bench considered the practical challenges in establishing a direct correlation between specific materials and their usage in repair/maintenance activities. Despite these challenges, the bench found the appellant's documentation from the Finance Department to be sufficient evidence of the materials' usage for maintenance/repair of capital goods in their factory. Consequently, the bench ruled in favor of the appellant, setting aside the impugned order and allowing the appeal for CENVAT credit on the materials in question. In conclusion, the judgment by the Appellate Tribunal CESTAT Hyderabad, delivered by Member (Technical) P. Venkata Subba Rao, resolved the issues of entitlement to CENVAT credit on specific materials used for maintenance of capital goods and the proof required to establish their usage. The decision upheld the appellant's right to claim CENVAT credit based on legal precedents and satisfactory documentation demonstrating the materials' utilization for repair/maintenance activities.
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