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2017 (3) TMI 915 - AT - Central ExciseCENVAT credit - plates - shape and section - MS angles - GP coil/sheet - HR coil - CR strip - MS channels - paints - storage tanks - Held that - the issue of Cenvat credit on the items in question have been decided in favour of the appellant-assessee in their own case in preceding rulings of this Tribunal Dhampur Sugar Mills Ltd. Versus Commissioner of Central Excise, Meerut-II 2016 (8) TMI 492 - CESTAT ALLAHABAD wherein it has been held that MS/SS plates used for repair and maintenance of machinery which are further used for manufacture of final excisable products are eligible for modvat credit - Further storage tank is an eligible capital asset u/s 2(a)(A)(VII) - credit allowed - appeal allowed - decided in favor of assessee.
Issues: Admissibility of Cenvat credit on various items used by the appellant manufacturer of VP sugar and molasses; Disallowance of credit by Adjudicating Authority; Appeal before learned Commissioner (Appeals); Interpretation of items as construction/fabrication materials; Disallowance upheld by learned Commissioner; Extended period for demand; Conflicting decisions on extended period; Settlement of law by larger bench in Vandana Global Limited case; Setting aside of penalties.
The judgment in the appeals before the Appellate Tribunal CESTAT ALLAHABAD revolves around the admissibility of Cenvat credit on items such as plates, shape and section, MS angles, GP coil/sheet, HR coil, CR strip, MS channels, and paints procured and used by the appellant, a manufacturer of VP sugar and molasses during the period from April 2006 to September 2007. The Adjudicating Authority initially disallowed the Cenvat credit on these items, leading to a recovery order under Rule 14 of CCR, 2004 along with a penalty. The learned Commissioner (Appeals) partially allowed the appeals, recognizing most of the items as construction/fabrication materials used in the factory. The appellant argued that these items were utilized for various fabrication purposes in the distillery plant, supporting their claim with certificates of usage. However, the Commissioner upheld the disallowance, stating that the supporting structures created were not essential for the production or processing of manufactured goods, hence not eligible for credit as capital goods or components. Additionally, the Commissioner addressed the issue of the extended period for demand, citing conflicting Tribunal decisions and the settlement of the law by a larger bench in the Vandana Global Limited case in 2008, ultimately setting aside the demand for the extended period and the imposed penalties. Upon hearing the parties and considering the contentions, the Member (Judicial) noted that the issue of Cenvat credit on the items had been previously decided in favor of the appellant-assessee in their own case in preceding rulings of the Tribunal. Referring to specific final orders and rulings of the Hon'ble Rajasthan High Court and the Hon'ble Madras High Court, the Member found precedence for the eligibility of items like MS/SS plates and steel items used in fabrication of supporting structures for installation and operation of machinery as inputs for the manufacture of excisable final products. Relying on these precedents, the Member allowed the appeals and set aside the impugned orders that levied duty or disallowed input credit on the items in question. In conclusion, the Appellate Tribunal CESTAT ALLAHABAD ruled in favor of the appellant, allowing the Cenvat credit on the items in question based on established legal precedents and interpretations regarding the eligibility of certain materials as inputs for the manufacturing process of excisable final products. The judgment highlights the importance of legal precedents and interpretations in determining the admissibility of credit and sets aside the disallowance and penalties imposed by the Adjudicating Authority and the learned Commissioner (Appeals).
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