2015 (2) TMI 268 - AT - Central Excise

Disallowance of Cenvat credit - various items of iron and steel and also the items of Copper and Aluminium which had been used for various purposes in the manufacturing plant - Commissioner allowed partial credit and disallowed partial holding that items have been used mainly as supporting structures - Held that - As regards the structural steel items which have been used for transmission towers for transmission of electricity from the power plant to the manufacturing plant, in view of the judgment of the Tribunal in the case of Sanghi Industries ltd. vs Commissioner of Central Excise Rajkot reported in 2006 (4) TMI 422 - CESTAT, NEW DELHI , Cenvat credit would be admissible. As regards, the Cenvat credit in respect of the items of heading 7402, 7407 and 7606, these are aluminium, copper or cathode plates used in the cell house for electrolysis and the same would be admissible for Cenvat credit in view of the judgments of the Tribunal in the cases of Cominco Binani Zinc Ltd. vs CCE Reported in 1990 (1) TMI 184 - CEGAT, MADRAS ; CCE Baroda vs. Atul Products Ltd. reported in 1997 (12) TMI 637 - CEGAT BOMBAY & CCE Kochi vs Travancore cochin Chemicals Ltd. reported in 1994 (9) TMI 206 - CEGAT, MADRAS . - appellant have prima facie case in their favour. Therefore, the requirement of pre-deposit of Cenvat credit demand, interest and penalty is waived for hearing of the appeal and recovery thereof is stayed - Stay granted.

Summary

Issues:
Admissibility of Cenvat credit on various iron, steel, copper, and aluminum items used in manufacturing plant.

Analysis:
The appeal involved the admissibility of Cenvat credit on various iron, steel, copper, and aluminum items utilized in a manufacturing plant during a specific period. The Commissioner disallowed the credit for most items, allowing it only for a few specific items. The Commissioner's decision was based on the assertion that the disallowed items were primarily used as supporting structures and therefore ineligible for Cenvat credit. The appellant contested this decision, arguing that the items were actually used in the fabrication of machinery components, not merely as supporting structures. The appellant also cited relevant tribunal judgments to support their claim.

The Tribunal carefully reviewed the usage of the items in question, as verified by the Assistant Commissioner. Contrary to the Commissioner's finding, the Tribunal observed that the items were not solely used as supporting structures, as indicated by the usage details provided. The Tribunal specifically highlighted that certain structural steel items used for transmission towers and certain aluminum, copper, and cathode plates used in specific processes were eligible for Cenvat credit based on precedent tribunal judgments.

Ultimately, the Tribunal found merit in the appellant's arguments and held that they had a prima facie case in their favor. Consequently, the Tribunal waived the requirement of pre-deposit for the Cenvat credit demand, interest, and penalty, allowing the appeal to proceed without immediate financial obligations. The stay application was granted based on the Tribunal's assessment of the appellant's case and the relevant legal precedents cited.

In conclusion, the judgment addressed the complex issue of Cenvat credit admissibility for various items used in a manufacturing plant, emphasizing the importance of detailed usage analysis and legal precedents in determining eligibility. The Tribunal's decision to waive the pre-deposit requirement showcased a balanced approach to ensuring fair consideration of the appellant's case during the appeal process.