2017 (6) TMI 107 - AT - Central Excise

CENVAT credit - steel structures used in the manufacturing of supporting structurals - Held that - subject matter is covered by Hon ble Madras High Court decision in case of India Cement Ltd .Vs CESTAT, Chennai 2015 (3) TMI 661 - MADRAS HIGH COURT , where on similar issue the credit stands allowed - The Tribunal in the case of Singhal Enterprise Pvt. Ltd Vs CCE Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI has also held that structural steel items used in fabrication of support structurals are to be treated as parts of capital goods and are eligible for claiming CENVAT credit by the manufacturers - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat credit on steel structures used in manufacturing supporting structurals.
2. Contesting the dropping of demand based on non-application of extended period clause.

Issue 1: Denial of Cenvat credit on steel structures:
The appeal was filed against the denial of Cenvat credit on steel structures used in manufacturing supporting structurals. The Hon'ble Madras High Court decision in the case of India Cement Ltd vs. CESTAT, Chennai was cited, where it was observed that the goods were essential for supporting machinery like crushers and kilns. The Apex Court's decision in the case of Commissioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd. was referenced, highlighting the use of items in the erection of machinery as integral components. The Tribunal also referenced a similar case where structural steel items were considered parts of capital goods eligible for Cenvat credit. Ultimately, the Tribunal allowed the appeal, stating that the subject input items were eligible for claiming Cenvat credit.

Issue 2: Contesting the dropping of demand based on non-application of extended period clause:
The revenue had filed a cross-appeal contesting the dropping of demand based on the non-application of the extended period clause. However, the Tribunal's decision, based on the principles laid down in previous judgments and the application of the "user test" to determine the eligibility of structural items for Cenvat credit, led to the rejection of the revenue's appeal. The Tribunal upheld the order allowing the appellant's appeal and rejected the revenue's appeal as lacking in merit.

In conclusion, the judgment allowed the appeal filed by M/s Crest Steel and Power Pvt. Ltd, modifying the impugned order to allow claiming Cenvat credit on the steel structures used in manufacturing supporting structurals. The revenue's appeal was rejected as lacking in merit.