2016 (8) TMI 287 - AT - Central Excise

Availability of cenvat credit. - eligible inputs - Structural items such as M.S. Flats, Channels, Plates, Beams etc which are used to fabricate structures to house the coal washing plant are covered within the definition of input given in Rule 2 (k) of the Cenvat Credit Rule, 2004 Held that - all the goods used in relation to manufacture of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for Cenvat Credit. It is not in dispute that the appellant is a taxable service provider on port under the category of port services decided against revenue.

Summary

Issues: Availability of CENVAT Credit on structural items used in coal beneficiation plant infrastructure.

Analysis:
1. Issue: Dispute regarding CENVAT Credit on structural items.
- The appeal concerns the availability of CENVAT Credit on items like Plates, M.S. Channels, Angles, Beams, Flats used in sheds and civil construction or for manufacturing capital goods. The Original Authority denied the benefit, but the Commissioner (Appeals) allowed it.

2. Analysis:
- The Original Authority denied CENVAT Credit, stating that structural items used for fabricating technological structures at the site, becoming immovable property, do not qualify as components of capital goods for a service provider like the assessee.

3. Analysis:
- The Commissioner (Appeals) allowed CENVAT Credit on these items, treating them as components of structures forming capital goods, citing the judgment of Bhushan Steel & Strips Ltd. Vs. CCE, Raigad.

4. Analysis:
- The Tribunal noted the dispute about whether structural items used for coal washing plant infrastructure qualify as inputs under Rule 2 (k) of the CENVAT Credit Rules, 2004.

5. Analysis:
- Referring to the Gujarat High Court case of Mundra Ports & Special Economic Zone Ltd. Vs. CCCE & Cus., the Tribunal found that the issue was settled. The High Court allowed the credit on cement and steel used in constructing jetties for providing tube service, even for a service provider.

6. Analysis:
- The Tribunal concurred with the High Court's decision, emphasizing that all goods used by a provider of taxable service for output service are eligible for CENVAT Credit, as per Rule 2 (k). Therefore, the Tribunal allowed the CENVAT Credit, rejecting the Revenue's appeal.

This judgment clarifies the eligibility of CENVAT Credit on structural items used in infrastructure setup for service providers, aligning with the Gujarat High Court's interpretation and emphasizing the broad scope of Rule 2 (k) for input credit eligibility.