9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 669 - AT - Central ExciseCENVAT Credit - inputs - iron & steel items such as M.S.Angle, H.R. Plate, M.S. Beam, M.S.Channel etc. - the main thrust of the argument of the Revenue is that the iron and steel items were mainly used in the support structure and will not satisfy the criteria of parts and components or accessories of such machinery - Held that - The observation of Revenue has to be supported by material facts. The same is not available in the present appeal. It is to be noted that whether iron and steel item is to be considered as part or component or accessory of capital goods can be decided by applying user test as decided in Jawahar Mills Ltd. 2001 (7) TMI 118 - SUPREME COURT OF INDIA - Admittedly, in large number of cases, the Tribunal as well as various High Courts allowed credit in similar set of facts. Credit allowed - appeal dismissed - decided against Revenue.
Issues:
Eligibility of CENVAT credit on iron and steel items used for manufacturing support structures, application of the "user test" principle, interpretation of capital goods definition, retrospective application of amendments to Rule 2(a) of Cenvat Credit Rules. Analysis: The case involved a dispute regarding the eligibility of CENVAT credit on iron and steel items used for manufacturing support structures. The respondents, engaged in the manufacture of sponge iron and MS Ingots, had availed and utilized Cenvat Credit on various iron and steel items. The Revenue contended that these items did not qualify under the definition of Rule 2(k) of the Cenvat Credit Rules, 2004. The adjudicating authority disallowed the credit, leading to an appeal by the Revenue before the Tribunal. During the proceedings, the ld. Consultant for the respondent assessee argued that the Commissioner(Appeals) had correctly decided the case in favor of the assessee based on the application of the "user test" principle. The consultant cited the case law of Commissioner of Central Excise v. Jawahar Mills Ltd. and various decisions of the Tribunal, High Courts, and Supreme Court to support their position. The Tribunal, after hearing both sides and examining the appeal records, focused on whether the iron and steel items qualified as parts or components of capital goods based on the "user test" principle. The Tribunal noted that the lower appellate authority had examined the usage of these items in capital goods and their accessories inside the manufacturer's premises. The Tribunal emphasized the importance of material facts to support the Revenue's argument that the items were mainly used in support structures and not as parts or components of machinery. The Tribunal referred to various precedents, including decisions of the Supreme Court and High Courts, to establish the consistent application of the "user test" principle in determining the eligibility of CENVAT credit on similar items used in the fabrication of capital goods. The Tribunal highlighted that the structural items, when used in the fabrication of support structures for capital goods, fell within the definition of 'Capital Goods' under Rule 2(a) of the Cenvat Credit Rules, making them entitled to the credit. In conclusion, the Tribunal relied on the detailed analysis conducted in the impugned order, which aligned with the legal precedents set by the Supreme Court, High Courts, and the Tribunal itself. The Tribunal found no reason to interfere with the order and dismissed the appeal, along with disposing of the Cross Objection. This judgment provides a comprehensive overview of the application of the "user test" principle in determining the eligibility of CENVAT credit on iron and steel items used for manufacturing support structures, emphasizing the importance of factual analysis and legal precedents in reaching a sustainable conclusion.
|
