2024 (5) TMI 1146 - AT - Central Excise

CENVAT Credit - inputs/capital goods - various steel items used in manufacturing sponge iron - HELD THAT - As the assessee is able to prove that all the items in question have been used in fabrication of structures for installation of capital goods which were ultimately used in the manufacture of their final product, in the circumstances, as per the decision of the Hon ble Chhattisgarh High Court in the case of M/s. Vandana Global Ltd. v. Commissioner of C.Ex. Cus., Raipur 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT CENVAT Credit to the assessee is allowed. The appeal filed by the Revenue is dismissed.

Summary

Issues:
- Whether the items availed by the assessee qualify as 'input' or 'capital goods' for the manufacture of sponge iron.
- Whether the CENVAT Credit availed by the assessee on various steel items during the impugned period is admissible.
- Whether the amount involved in the appeal falls within the monetary limit prescribed for litigation before CESTAT.
- Whether the items were used in the fabrication of structures for the installation of capital goods.
- Whether the penalty is imposable on the assessee.

Analysis:

The case involves an appeal against the impugned order regarding the eligibility of various steel items availed by the assessee for CENVAT Credit during the manufacture of sponge iron. The Revenue contended that these items did not qualify as 'input' or 'capital goods' for sponge iron production. Show Cause Notices were issued to deny the credit, leading to partial allowance and denial based on the application of the items in the manufacturing process. Both parties appealed the decision, with the assessee also filing a cross-objection.

During the hearing, the Revenue acknowledged that the amount involved in their appeal was below the prescribed monetary limit for CESTAT litigation. The assessee argued that the items were used in fabricating plant and machinery for their final product, supported by a certificate from a Chartered Engineer. The Revenue reiterated the findings in the impugned order.

After hearing both sides, the Tribunal found that the items were indeed used in fabricating structures for the installation of capital goods, following the decision of the Hon'ble Chhattisgarh High Court in a similar case. Consequently, the CENVAT Credit was allowed to the assessee. The Tribunal also confirmed the demand for a specific amount that the assessee did not press for, along with interest. No penalty was imposed on the assessee based on the circumstances of the case.

Therefore, the appeal filed by the Revenue was dismissed, and the cross-objection by the assessee was disposed of accordingly. The Tribunal held that no penalty was imposable on the assessee, concluding the matter in favor of the assessee based on the usage of the items in the fabrication process and the legal precedent cited.