2020 (4) TMI 273 - AT - Central Excise

CENVAT Credit - input services - Angles, Channels, Sheets and Plates etc. used in structural support and also fabricated structurals like technological structure, cable tray, earthing strip, used in the factory of production - HELD THAT - Hon ble Madras High Court in the case of M/S. INDIA CEMENTS LTD. VERSUS THE CUSTOM, EXCISE AND SERVICE TAX THE COMMISSIONER OF CENTRAL EXCISE, 2015 (3) TMI 661 - MADRAS HIGH COURT has held that steel items like MS Rod, Sheet, MS Channel, MS Plate, Flat, etc., used for erection of capital goods or used for fabrication of structural to support various machines, such as crusher, Kiln, hoopers, etc., and without such structural, machinery could not be erected and would not function. It was held that on these items, Cenvat credit is allowable in terms of Rule 2(a) (A) of Cenvat Credit Rules, 2004 - credit is available in respect of iron and steel items like Angles, Channels, Sheets, Plates etc., used as structural support. CENVAT Credit - fabricated structural procured from suppliers like McNally Bharat, and as well as MIDH Private Limited. - HELD THAT - Being items like technological structure, which have been used in flotation cell, SPVC pumps. Further, Cable Tray have been used for support of cables in the flotation cell and earthing strips have been used for earthing in pressure filters. Cable tray have also been used for support of cables in pressure filters. CENVAT Credit - technological structures, cable tray, earthing strip etc. procured from Macnically Bharat and MIDH Private Limited - HELD THAT - The details furnished have not been found to be untrue and further, no reliance can be placed on the verification reports of the Range superintendent dated 31.03.2017, as the copy of the said report was never made available to the appellant/asseessee - the appellant is entitled to cenvat credit also for this amount of ₹ 7,92,597/-. Demand set aside - penalty also set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Disallowance of cenvat credit on items like Angles, Channels, Sheets, Plates used in structural support and fabricated structurals like technological structure, cable tray, earthing strip in the factory of production.

Analysis:
1. Disallowed Cenvat Credit on Structural Support Items:
The appellant's appeal involved the disallowance of cenvat credit on items like Angles, Channels, Sheets, and Plates used in structural support. The appellant argued that this issue had been previously settled in their favor by a Division Bench of the Tribunal. Additionally, reference was made to a judgment by the Hon'ble Madras High Court, which allowed cenvat credit on steel items used for erection of capital goods or fabrication of structures supporting machinery. The Tribunal concurred with these arguments and held that cenvat credit is available for iron and steel items used as structural support.

2. Disallowed Cenvat Credit on Fabricated Structurals:
Another aspect of the appeal concerned the disallowance of cenvat credit amounting to &8377;7,92,597 for fabricated structurals procured from suppliers like McNally Bharat and MIDH Private Limited. The appellant contended that these items, such as technological structures, cable trays, and earthing strips, were essential for specific purposes in the factory. The Tribunal noted that the disallowance lacked reasoning and was based on a report not provided to the appellant. The appellant had submitted detailed evidence, including a chart with specific usage details of the procured items, which were found to be credible. As the verification report was not disclosed to the appellant, the Tribunal held that the appellant was entitled to cenvat credit for this amount.

3. Decision and Conclusion:
In conclusion, the Tribunal allowed all three appeals, setting aside the order that disallowed cenvat credit. The penalty imposed was also revoked, and the appellant was granted consequential benefits as per the law. The judgment highlighted the importance of providing specific evidence regarding the usage of items for claiming cenvat credit and emphasized the need for transparency in the adjudication process.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each aspect of the appeal.