2019 (5) TMI 654 - AT - Central Excise

CENVAT Credit - capital goods - HR coils, MS angles, MS channels, MS plates, MS flats etc. falling under Chapter 72 of CETA, 1985 - Commissioner(Appeals) has in fact accepted the admissibility of credit on various items but remanded the case back to the original authority for verification of the usage even after certificate from Chartered Engineer was submitted by the appellant. HELD THAT - Most of the impugned goods have been covered in the definition of inputs and have been used for repair and maintenance / fabrication of capital goods. The various decisions have held the eligibility of the assessee for CENVAT credit for various goods which have been used for manufacturing of final product. Further the credit of ₹ 26,27,670/- have been availed on the goods falling under Chapters 84, 85, and 90 which are specifically covered in the definition of capital goods as contained in Rule 2(a) of CCR, 2004. Besides this, the Chartered Engineer has certified the usage of all the impugned goods which are in dispute in the present case and he has certified that the material used for machinery and accessories are part and parcel of the said machines and he has also certified utilization / consumption of material during the period from September 2015 to March 2016. He has given the certificate of usage of each and every item which has not been considered by both the authorities below. The impugned order is not sustainable in law - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order remanding case for examination of actual usage of impugned goods.

Analysis:
The appellant, engaged in sugar and molasses manufacturing, availed CENVAT credit on goods under Chapter 72 of CETA, treating them as capital goods. The original authority confirmed a demand for wrongly availed credit, which the Commissioner(Appeals) remanded for actual usage examination. The appellant argued that credit on steel material under Chapter 72 was used for repair/maintenance/fabrication of eligible capital goods, citing relevant case laws. The Chartered Engineer certified disputed goods' usage for machinery support structures, maintenance, and modification. The Tribunal found the Commissioner(Appeals) accepted credit admissibility on various items but remanded for verification, despite the engineer's certificate. Most goods were considered inputs for repair/maintenance/fabrication of capital goods, supported by case laws. The Tribunal referenced a Supreme Court decision applying the "user test" to determine capital goods eligibility. The Chartered Engineer's certificate, validating disputed goods' usage, was crucial. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief.

Conclusion:
The Tribunal's detailed analysis focused on the admissibility of CENVAT credit on goods used for manufacturing processes, emphasizing the importance of the Chartered Engineer's certification and relevant case laws. By overturning the remanding order and allowing the appeal, the Tribunal ensured fair treatment based on legal principles and factual evidence, providing relief to the appellant.