2018 (6) TMI 980 - AT - Central Excise

CENVAT credit - structural steel viz. MS angles, beams, plates, channels etc. - usage of the items for the period prior to 7.7.2009 - Held that - The Revenue being aggrieved by the order-in-original, filed appeal before the Commissioner (Appeals) who, completely ignoring the direction given by the Tribunal, has gone on different aspect and set aside the order-in-original on the ground that the steel items were used for repair and maintenance of the existing capital goods - Even if it is assumed that the steel items were used for repair and maintenance, but the fact remains that it was used for fabrication of structurals for capital goods. Therefore, whether it is newly made structurals or even for repair, credit is admissible - appeal allowed - decided in favor of appellant.

Summary

Issues:
Admissibility of cenvat credit for structural steel items under Chapters 72 and 73 used for fabrication and erection of various structures for capital goods.

Analysis:
The case involves the admissibility of cenvat credit for structural steel items like MS angles, beams, plates, and channels under Chapters 72 and 73. The Tribunal previously remanded the matter with a clear direction that if the steel items were used for fabrication and erection of cooling towers, storage tanks, construction of sheds, and support structurals for capital goods, credit should be allowed. The adjudicating authority allowed cenvat credit based on the detailed use of each item. However, the Revenue appealed before the Commissioner (Appeals), who disallowed the credit, stating the items were used for repair and maintenance of existing capital goods, not for fabrication of new structurals.

The appellant argued that the steel items were indeed used for fabrication and support of capital goods, as directed by the Tribunal, and the Commissioner (Appeals) erred in disallowing the credit on new grounds. The Tribunal's previous order clearly outlined that credit should be allowed if the steel items were used for fabrication and erection of specific structures for capital goods. The adjudicating authority, after detailed verification, confirmed the usage aligning with the Tribunal's directive, leading to the dropping of the demand.

In conclusion, the Tribunal found that the Commissioner (Appeals) disregarded the Tribunal's direction and wrongly concluded that the steel items were used for repair and maintenance, instead of fabrication for capital goods. Whether for new structurals or repairs, the steel items were utilized for capital goods, making the credit admissible. Therefore, the Tribunal set aside the Commissioner (Appeals) order and allowed the appeal in favor of the appellant.