2018 (3) TMI 840 - AT - Central Excise

CENVAT credit - inputs/capital goods - HR Plates, Base Plates, MS Channels, MS plates, Angles etc - Held that - there is no dispute as to the fact that these items were received in the factory premises and consumed for fabrication of various frame works for lift operation, furnace control room etc. - Hon ble High Court of Madras in the case of Thiru Arooran Sugars Vs CESTAT 2017 (7) TMI 524 - MADRAS HIGH COURT has specifically held that these items are eligible for availment of CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of CENVAT credit on HR Plates, Base Plates, MS Channels, MS plates, Angles etc. during July 2006 to December 2009.

Analysis:
The appeal was against Order-in-Original No. 26/2010 dated 22/12/2010, focusing on the denial of CENVAT credit on specific items. The Revenue contended that these items were neither inputs nor capital goods, hence ineligible for credit. However, the appellant argued that these items were utilized in fabricating capital goods, structural frameworks, and various systems. Upon reviewing the submissions and records, it was established that the items were indeed used for fabrication purposes, such as frame works for lift operation and furnace control room. The adjudicating authority's decision was based on a Tribunal's Larger Bench ruling in Vandana Global, which was later overturned by the Hon'ble High Court of Gujarat in the case of Mundra Port & SEZ Ltd Vs CCE [2015(39)STR 726].

Further, the Hon'ble High Court of Madras had ruled in specific cases that the disputed items were eligible for CENVAT credit, as evidenced by cases like Thiru Arooran Sugars Vs CESTAT [2017(355)ELT 373 (Mad)], Dalmia Cements Vs CESTAT [2016(341)ELT 102 (Mad)], and CCE Vs India Cements Ltd [2014-TIOL-1185-HC-Mad]. This judicial stance was also followed by the Tribunal in cases like Andhra Sugars Vs CCE Guntur [2016(343)ELT 1051(Tri-Hyd)] and Binjusaria Sponge & Iron power Pvt Ltd Vs CCE Hyderabad [2016-TIOL-1058-CESTAT-Hyderabad].

Consequently, considering the settled issue by higher judicial authorities and the inconsistency with the impugned order, the Tribunal found the order unsustainable. Therefore, the impugned order was set aside, and the appeal was allowed, emphasizing the importance of following established legal precedents for CENVAT credit eligibility.