2021 (3) TMI 660 - AT - Central Excise

CENVAT Credit - input - HR coils - MS plates - HT strappings - HRSS plates - GI flat - Grate Plate - CI Bend - MS Boiler Plates - SS Plates - HELD THAT - The appellant vide their reply dt. 10/06/2016 for each item/part, has given the details for consideration by the adjudicating authority vide description of the item/part typical diagram of the image, detailed write up of the items used and amount of cenvat credit of such item/part, date of availment of credit, serial number of the item/part etc. From all these descriptions given by the appellant in the reply to the show-cause notice, it is clear that these items are part and parcel of various goods and has rightly been classified as inputs for fabrication of various capital goods as per Rule 2(k) of CENVAT Credit Rules, 2004 which in turn are used in the manufacture of finished goods and therefore are eligible for cenvat credit. At the appellate stage also, in order to satisfy the Commissioner(Appeals) regarding the actual usage of these items, the appellant furnished the certificate of Chartered Engineer as required by the appellant authority but unfortunately the Commissioner(Appeals) has not given due weightage to the certificate of the Chartered Engineer where the Chartered Engineer has given usage of each and every item involved in the present case. This issue is no more res integra and has been settled by various decisions of the Tribunal relied upon by the appellant. The various decisions relied upon by the appellant have held the eligibility of the assessee for cenvat credit on various goods which have been used for manufacture of the final product - reliance can be placed in the case of M/S. SINGHAL ENTERPRISES PRIVATE LIMITED VERSUS THE COMMISSIONER CUSTOMS CENTRAL EXCISE, RAIPUR 2016 (9) TMI 682 - CESTAT NEW DELHI . Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against rejection of cenvat credit on various items and confirmation of demand, interest, and penalties.

Analysis:
1. Facts of the Case:
- The appellant, engaged in manufacturing Iron Ore Pellets, Sponge Iron Lumps, and MA Billets, took cenvat credit on certain items like HR coils, MS plates, etc.
- A show-cause notice was issued for recovery of ineligible cenvat credit, which was confirmed by the original authority and upheld by the Commissioner(Appeals).

2. Appellant's Arguments:
- Appellant contended that the items were used in fabrication of capital goods or their components, supported by documents like purchase requisitions, invoices, etc.
- Submitted Chartered Engineer certificate to prove usage, which was disregarded by the Commissioner(Appeals).
- Cited judicial precedents supporting eligibility for cenvat credit on similar items.

3. Legal Precedents and Arguments:
- Referring to decisions like Ugar Sugar Works Ltd. and India Sugars and Refineries Ltd., appellant argued for entitlement to cenvat credit.
- Mentioned the Supreme Court ruling in CCE vs. Rajasthan Spinning & Weaving Mills Ltd. supporting credit on equipment used for specific purposes.
- Quoted Tribunal's decision in Mangalam Cement Ltd. case, emphasizing eligibility of cement and steel items as accessories for capital goods.

4. Respondent's Stand:
- The learned AR reiterated the findings of the impugned order without additional arguments.

5. Tribunal's Decision:
- Tribunal examined detailed descriptions provided by the appellant, concluding that the items were integral to the fabrication of capital goods, making them eligible for cenvat credit.
- Emphasized the importance of the Chartered Engineer certificate and cited various decisions, including the Division Bench ruling in Singhal Enterprises Pvt. Ltd. case, to support the appellant's claim.
- Referred to the 'user test' principle from previous judgments to validate the usage of structural items in support structures for capital goods.

6. Final Verdict:
- The Tribunal found the impugned orders unsustainable in law, setting them aside and allowing the appeals with consequential relief, if any.
- The decision was pronounced in Open Court on 09/03/2021.

This comprehensive analysis covers the issues raised, arguments presented, legal precedents cited, and the final decision rendered by the Appellate Tribunal CESTAT Bangalore in the mentioned judgment.