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2020 (5) TMI 317 - AT - Central ExciseCENVAT Credit - capital goods - cement, rebar coils, TMT bars and MS rebar utilized in foundation of machinery, machinery foundation, recovery foundation, ESP foundation, storage tanks etc. - HELD THAT - So far storage tank is concerned, this is a specific item of capital goods mentioned in Rule 2 (a)(A)(vii) of CENVAT Credit Rules, 2004. Other items of iron and steel - HELD THAT - These items are admittedly utilized in the foundation and erection of machinery, the issue stands settled in favour of the appellant by ruling of 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 and also by the Hon ble Gujarat High Court in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS 2015 (5) TMI 663 - GUJARAT HIGH COURT . Appeal allowed - decided in favor of appellant.
Issues:
Entitlement to CENVAT credit on items of cement, rebar coils, TMT bars, and MS rebar used in various foundations and machinery. Analysis: The main issue in this case was whether the appellant could claim CENVAT credit on specific items like cement, rebar coils, TMT bars, and MS rebar, which were utilized in the construction of foundations for machinery, storage tanks, etc. The impugned order disallowed the credit based on a previous ruling by the Tribunal in the case of Vandana Global Ltd. VS CCE. However, the appellant argued that subsequent rulings by the Tribunal and the High Court favored their position. The Tribunal examined the matter and found that while the storage tank qualified as a capital good under the CENVAT Credit Rules, 2004, the other iron and steel items used in the foundation and erection of machinery were also eligible for credit. This decision was supported by judgments from the Madras High Court and the Gujarat High Court in cases involving similar issues. Additionally, the Chhattisgarh High Court had ruled in favor of the assessee, overturning the Tribunal's decision in the Vandana Global Ltd. case. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and holding that the CENVAT credit on iron and steel items used for fabrication, construction, and as capital goods by the appellant was permissible. As a result, all appeals were allowed with any consequential benefits, and the disallowance of CENVAT credit on iron and steel items was overturned.
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