2017 (12) TMI 695 - AT - Central Excise

CENVAT credit - capital goods - structural items used in the construction of structures on which pipelines passes through - Held that - The Division Bench in the case of Singhal Enterprises Pvt. Ltd. Vs. CCE, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI had after considering numerous case laws on the issue of cenvat credit on structural steel, held that cenvat credit can be availed on structural items - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Condonation of delay in filing Cross Objection, interpretation of Cenvat Credit Rules regarding availing credit on structural items, applicability of previous judgments on similar issues.

Analysis:

Issue 1: Condonation of Delay
The application for condonation of delay in filing the Cross Objection was dismissed due to lack of merits, and subsequently, the cross objection was also dismissed. The Tribunal found the application devoid of merits and decided to dismiss it.

Issue 2: Interpretation of Cenvat Credit Rules
The appeal was filed by the Revenue against an order that dropped demands for payment of cenvat credit on structural items used in the construction of structures with pipelines passing through. The Revenue argued that items like steel for grating and ladders do not qualify as capital goods under the Cenvat Credit Rules. However, after considering various judgments, the Tribunal held that cenvat credit can be availed on structural items. The Tribunal referenced the decision of the Apex Court in a similar case involving steel plates and MS channels used in the fabrication of chimneys, where the user test was applied to determine if the goods could be considered capital goods. The Tribunal concluded that the structural items used in the fabrication of support structures fell within the ambit of capital goods as defined under the Cenvat Credit Rules.

Issue 3: Applicability of Previous Judgments
The Tribunal cited the Division Bench decision in the case of Singhal Enterprises Pvt. Ltd. and a previous case involving NCL Industries Limited to support their ruling on availing cenvat credit on structural items. Additionally, a judgment by the Hon'ble High Court of Madras in the case of India Cements Limited was referenced to further strengthen the decision. The Tribunal found that the impugned order was correct and legal, and therefore, dismissed the appeal filed by the Revenue.

In conclusion, the Tribunal dismissed the application for condonation of delay, upheld the decision to allow cenvat credit on structural items, and relied on previous judgments to support their decision. The impugned order was deemed correct and legal, leading to the dismissal of the Revenue's appeal.