2022 (9) TMI 851 - AT - Central Excise

CENVAT Credit - capital goods - MS Plates used in fabrication of Plant and Machinery - period October, 2009 to March, 2010 - HELD THAT - It is held that the Larger Bench ruling of this Tribunal has been set aside and reversed by the Hon ble Chhattisgarh High Court in the appeal by M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT , wherein, it has been held that Cenvat credit of service tax on inputs like MS Angles/ beams/ bars/ plates, etc., which go into fabrication of structures embedded to earth are to be treated as inputs used in relation to the final products, as inputs or capital goods. The appellant have rightly taken Cenvat credit on the inputs, capital goods and input services in question - Appeal dismissed - decided against Revenue.

Summary

Issues:
- Whether Cenvat credit on MS Plates used in fabrication of Plant and Machinery/capital goods during October 2009 to March 2010 was rightly denied.

Analysis:
1. The appellant, a cement manufacturer, procured MS Plates for fabrication of Plant and Machinery and claimed Cenvat credit. A show cause notice was issued based on a ruling stating that Cenvat credit is not applicable on items used in fabrication of capital goods. The notice proposed disallowing Cenvat credit on MS Plates used in immovable property like Plant and Machinery. The impugned Order-in-Original confirmed Cenvat credit availability on MS Plates used in fabrication, citing the rule allowing credit on inputs used in the factory of production. The Commissioner also allowed Cenvat credit on input services related to manufacturing and setting up the factory, rejecting the proposal to disallow credit based on exempted final products.

2. The Revenue appealed, citing the Larger Bench ruling that disallowed Cenvat credit on disputed goods and services used in civil construction activities and fabrication works. However, the Tribunal noted that the Larger Bench ruling was overturned by the Chhattisgarh High Court in the Vandana Global Ltd. case. The High Court held that inputs like MS Plates used in structures embedded to earth qualify for Cenvat credit, relying on precedents from the Gujarat and Madras High Courts. The Tribunal concurred with the High Court's interpretation, allowing Cenvat credit on the disputed inputs, capital goods, and input services.

3. In conclusion, following the Chhattisgarh High Court's ruling, the Tribunal upheld the appellant's right to claim Cenvat credit on the inputs and services in question. The appeal by the Revenue was dismissed, affirming the availability of Cenvat credit on MS Plates used in fabrication of Plant and Machinery/capital goods during the specified period.

Judgment:
The Tribunal dismissed the Revenue's appeal, upholding the appellant's right to claim Cenvat credit on MS Plates used in the fabrication of Plant and Machinery/capital goods. The decision aligned with the Chhattisgarh High Court's interpretation, allowing the appellant to avail Cenvat credit on the disputed inputs and services.