2013 (2) TMI 223 - AT - Central Excise

CENVAT credit on MS plates and angles - denial of claim as appellant failed to prove that the above goods were used as components/spares/accessories of any goods - Held that - The claim of the appellant is that MS plates and angles were used to make cable trays/electrical trenches which are claimed to be capital goods falling under Rule 2(a)(A) of the CCR 2004. Neither the drawings nor the Chartered Engineer s certificate can be accepted as a substitute for evidence of the manner of actual use of the materials. The drawings are not dated, while the Chartered Engineer s certificate was issued on 04/10/2010. Neither of these documents can be said to have proved the manner of use of the plates and angles. Therefore, unable to interfere with the view of lower authorities that the assessee failed to prove that the plates and angles were used as components/spares/accessories of capital goods classifiable under Rule 2(a)(A) of the CCR 2004 - against assessee.

Summary

Issues:
1. Whether CENVAT credit can be denied to the appellant for duty paid on MS plates and angles.
2. Whether the plates and angles were used as components/parts of capital goods under Rule 2(a)(A) of the CENVAT Credit Rules 2004.
3. Whether the lower authorities' decision to deny CENVAT credit was justified.

Analysis:

Issue 1:
The appellant took CENVAT credit on duty paid for MS plates and angles received in their factory. The Department sought recovery, alleging failure to prove the goods' use as components of specified goods under Rule 2(a)(A) of CCR 2004. The original authority upheld the demand, imposed interest, and a penalty. The Commissioner(Appeals) rejected the appeal, leading to the present appeal.

Issue 2:
The appellant contended that the plates and angles were used to fabricate cable trays/electrical trenches for power distribution within the factory. They provided a Chartered Engineer's certificate and drawings supporting this claim. However, the Superintendent(AR) argued lack of evidence of actual use in manufacturing capital goods under Rule 2(a)(A) of CCR 2004.

Issue 3:
The Tribunal found the appellant's evidence insufficient to prove the plates and angles' use as components of capital goods. The drawings and certificate did not establish the actual use of materials. The documents lacked dates and could not substitute for evidence of use. Consequently, the lower authorities' decision to deny CENVAT credit was upheld, as the appellant failed to demonstrate compliance with Rule 2(a)(A) of CCR 2004.

In conclusion, the Tribunal dismissed the appeal, emphasizing the necessity of concrete evidence to support claims of CENVAT credit eligibility. The judgment underscores the importance of substantiating the use of materials as components of specified capital goods under relevant rules to avail of tax credits.