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2022 (9) TMI 623 - AT - Central ExciseCENVAT Credit - capital goods/iron and steel goods - Appellant submits that the impugned iron and steel goods are utilized by them for manufacture of capital goods such as Hopper, Conveyor, components, accessories of Crushing machine and EOT Cranes - HELD THAT - On examination of the observations made in Para 5.4 of the appeal order wherein the Ld.Commissioner(Appeals) has relied on the decision of the Larger Bench in the case of VANDANA GLOBAL LTD. VERSUS CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) to disallow the credit, it is found that the said decision of the Tribunal (Larger Bench) was challenged by the assessee before the Hon ble Chhattisgarh High Court in M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT , wherein the Tribunal s decision had been set aside - the contentions of the Appellant is agreed upon that the very basis followed by the Ld.Commissioner(Appeals) has now been settled in their favour. In the facts of the present case, it is not in dispute that the various steel items have been used for the purpose of setting up of coal washery plant as also certified by the Chartered Engineer and have been duly verified by the lower authorities at the adjudication stage. Therefore, applying the user test principle, as followed by various High Courts, the assessee is entitled to avail credit on the steel items. Appeal allowed.
Issues:
Claim of Cenvat credit for manufacturing capital goods from iron and steel materials under Cenvat Credit Rules, 2004. Analysis: 1. The Appellant, engaged in manufacturing sponge iron, claimed Cenvat credit for iron and steel materials used in manufacturing specified capital goods. The Department alleged contravention of Cenvat Credit Rules, leading to a Show Cause Notice and subsequent disallowance of a portion of the credit by the Adjudicating authority. 2. The Appellant argued that the iron and steel goods were used for manufacturing capital goods and not merely support structures. Citing legal precedents, including the Madras High Court judgment, they contended that support structures are considered capital goods, making them eligible for credit. They also challenged the decision of the Larger Bench of the Tribunal, supported by judgments from other courts. 3. The Authorized Representative for the Department supported the impugned order, asserting its meritlessness. 4. Upon hearing both sides and reviewing the records, the Member (Judicial) found that the disallowance of credit was solely based on the Larger Bench's decision, which was later set aside by the Chhattisgarh High Court. The Member agreed with the Appellant's contentions and quoted relevant portions of the High Court's decision. 5. The Member further discussed the principle of the "user test" as established by the Supreme Court and reiterated by the Madras High Court. Applying this test to the present case, where steel items were used in setting up a coal washery plant, the Member concluded that the Appellant was entitled to avail credit on these items. 6. Consequently, the impugned order was set aside, and the Appellant's appeal was allowed with consequential relief, in accordance with the law. This detailed analysis of the judgment highlights the issues, arguments presented by both parties, legal precedents cited, and the final decision rendered by the Member (Judicial) of the Appellate Tribunal CESTAT KOLKATA.
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