2023 (1) TMI 387 - AT - Central Excise

Denial of CENVAT Credit - Capital Goods - steel rack used for storage in the premises of the appellant s factory - HELD THAT - The issue is squarely covered by the aforesaid decision of Tribunal in the case of C.C.E. S.T. -RAJKOT VERSUS SANGHI INDUSTRIES LTD (VICE-VERSA) 2022 (5) TMI 475 - CESTAT AHMEDABAD where it was held that According to the definition of input as it existed during the relevant period, inputs used in the factory for any other purpose the credit is admissible. In this case there is no denial of the fact that furniture had been used within the factory. Appeal allowed.

Summary

Issues:
Denial of capital goods Cenvat Credit on steel rack used for storage in the factory premises.

Analysis:
The appellant, M/s. IDMC LTD., filed an appeal against the denial of capital goods Cenvat Credit on a steel rack used for storage in their factory premises. The learned counsel argued that the issue is covered by a previous decision of the Tribunal in the case of Sanghi Industries Ltd. The Authorized Representative relied on the impugned order. The Member (Technical) considered the rival submissions and found that the issue is indeed covered by the decision in the case of Sanghi Industries Ltd. The Tribunal had previously held that goods such as furniture used in an office within the factory are considered used in relation to manufacturing business and hence, credit on the same is allowed. Additionally, the Tribunal examined similar issues in other cases, such as the use of storage racks for storing raw materials being an integral part of the manufacturing activity, leading to the allowance of Cenvat credit.

The Tribunal's decision in the case of Ashok Leyland John Deere Construction Equipment Co. Pvt. Ltd. further supported the allowance of credit for steel racks used for raw material storage as an integral part of the manufacturing activity. The Tribunal cited various decisions where similar items like steel racks were considered integral to manufacturing activities, thus making them cenvatable. Relying on these precedents, the impugned order was set aside, and the appeal by M/s. IDMC LTD. was allowed.

In conclusion, the Tribunal's decision in this case reaffirms the principle that certain items, such as steel racks used for storage in factory premises, can be considered integral to manufacturing activities and therefore qualify for Cenvat credit. The judgment relied on previous decisions and established precedents to support the allowance of credit in such cases.