2017 (10) TMI 608 - AT - Central Excise

CENVAT credit - Iron & Steel items - the items in question were used in supporting structures of capital goods which are permanently attached to the earth - Held that - on the identical issue, the Tribunal in the case of Commissioner of Central Excise & Customs, BBSR-II Vs. S.P.S. Steel & Power Ltd. 2017 (7) TMI 844 - CESTAT KOLKATA , where it was held that the eligibility of a manufacturer for credit on iron steel and items which are in fact found to be used in the fabrication of identifiable capital goods which are in turn used for manufacture of excisable goods - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Appeal against Commissioner (Appeals) order disallowing CENVAT Credit on Iron & Steel items used in manufacturing Sponge Iron - Interpretation of capital goods and components eligibility for credit.

Detailed Analysis:
1. The appeal was filed by Revenue against the order of Commissioner (Appeals) where the adjudication order disallowing CENVAT Credit on Iron & Steel items used in the manufacture of Sponge Iron was set aside, and the appeal of the Respondent assessee was allowed.
2. The Revenue contended that the items were used in supporting structures of capital goods permanently attached to the earth, relying on the decision of the Larger Bench of the Tribunal in Vandana Global Ltd. The assessee argued that the items were used for fabricating/manufacturing steel structures like kiln, intel house, kiln cooler transfer house, and raw-material stock house.
3. The Tribunal referred to a similar case where the appeal filed by Revenue was dismissed, emphasizing that the usage of iron and steel items in capital goods fabricated inside the plant premises makes them eligible for credit. The Tribunal applied the user test as established by the Supreme Court to determine if the items qualify as parts or components of capital goods.
4. The Tribunal cited various precedents and judgments to support the decision, highlighting that steel items used in fabrication of support structures for capital goods fall within the ambit of Capital Goods as per Cenvat Credit Rules. The Tribunal also considered the decision of the Hon'ble Madras High Court and the Supreme Court in similar cases.
5. The Tribunal rejected the Revenue's appeal, concluding that the structural items used in the fabrication of support structures for capital goods are entitled to CENVAT Credit. The decision was based on the application of the user test and the definition of Capital Goods under the Cenvat Credit Rules.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's reasoning behind rejecting the Revenue's appeal and allowing the CENVAT Credit for the Iron & Steel items used in the manufacturing process.