2017 (10) TMI 890 - AT - Central Excise

CENVAT credit - steel items used for structure to support capital goods - Held that - the appellants have used the steel items on which credit has been availed as supporting structure for the capital goods - with effect from 07.07.2009 the definition of input appearing in Rule 2(k) of the Cenvat Credit Rules, 2004 has been amended and it specifically excludes cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods from the ambit of definition of inputs - appeal dismissed - decided against appellant.

Summary

Issues:
Demand of reversal of cenvat credit on steel items used for structure supporting capital goods.

Analysis:
The appeal was filed against the demand of reversal of cenvat credit on steel items used for supporting capital goods. The appellant relied on the apex court judgment in Rajasthan Spg & Weaving Mills and the Tribunal decision in APP Mills Ltd. The respondent relied on the impugned order and referred to the decision of the Tribunal in Vandana Global Ltd. and the apex court judgment in Saraswati Sugar Mills. The Tribunal noted that since nobody appeared for the appellant, the matter was taken for final disposal. The Tribunal distinguished the facts of the case from the Rajasthan Spg & Weaving Mills case, emphasizing that the steel items were used as supporting structure for capital goods.

The Tribunal referenced the apex court decision in Saraswati Sugar Mills, which clarified that iron and steel structures are not essential requirements in a manufacturing unit and do not qualify as component parts of capital goods. The Tribunal also highlighted Circular No.276/110/96-TRU, which specified that items used for fabrication of supporting structures are not eligible for credit. Additionally, the definition of "input" under the Cenvat Credit Rules, 2004 was amended to exclude certain items used for construction from the definition of inputs.

Based on the findings of the apex court and the relevant regulations, the Tribunal concluded that items used for the fabrication of supporting structures, including steel items, cannot be allowed for cenvat credit. Therefore, the appeal was dismissed, and no merit was found in the appellant's arguments. The judgment was pronounced on 19/9/17.