2017 (9) TMI 142 - AT - Central Excise

CENVAT credit - M.S. Channels, M.S. Angles, M.S. Plates, M. S. beam, and M.S. Sheets, TMT & CTD, Angles, FRP Sheets used for fabrication of capital goods - Held that - issue is covered by the decision in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI , where it was held that applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility of CENVAT credit on various structural steel items used in the fabrication of capital goods.

Analysis:
The appeal was filed against an order by the Commissioner (Appeals) regarding the eligibility of CENVAT credit on structural steel items used for fabrication of capital goods. The appellant had availed credit on various items like M.S. Channels, Angles, Plates, Beams, Sheets, TMT & CTD, and FRP Sheets. The dispute arose when it was alleged that these items did not fall under the definition of capital goods. The demand for recovery of credit was issued, and after adjudication, a portion of the demand was confirmed. The appellant argued that the items were used for fabrication of capital goods and hence eligible for credit as per the definition of 'input' under CCR, 2004. The appellant cited various judgments to support their claim, including decisions by the Supreme Court and High Courts.

The Revenue supported the findings of the Commissioner (Appeals), leading to a hearing where both sides presented their arguments. The issue revolved around the eligibility of CENVAT credit on structural steel items like M.S. Angles, Channels, Beams, etc., used in the fabrication of structures for capital goods. The Tribunal referred to a decision by the Principal Bench at Delhi in a similar case and analyzed the legal principles established by various High Courts and the Supreme Court. The Tribunal noted that the Larger Bench decision in a specific case had denied credit for structural items used as supporting structures, citing an amendment to the definition of 'Input.' However, the Tribunal also highlighted a judgment by the Gujarat High Court regarding the retrospective application of such amendments.

The Tribunal ultimately referred to a Supreme Court decision involving similar issues and the 'user test' to determine whether the structural items qualified as capital goods. Applying the 'user test,' the Tribunal concluded that the structural items used in the fabrication of support structures for capital goods fell within the definition of 'Capital Goods' under the Cenvat Credit Rules. Therefore, the duty paid on these items was deemed eligible for CENVAT credit. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per the law.