2018 (9) TMI 1132 - AT - Central Excise

CENVAT Credit - input/capital goods - old Structures and other structural items - Held that - There can be no doubt that the definition of inputs also covers the inputs used within the factory for manufacture of capital goods. The question begging a decision is whether goods procured by the appellant, which are admittedly in the form of scrap, have been used in the fabrication of capital goods such as EOT Crane Slag Crusher Machine, Pollution Treatment Plant, Mould Stand, Cable Tray etc. This fact has been certified by an independent Chartered Engineer vide his certificate dated 03/10/2015. The reason why such a certificate has not been accepted by the lower Authority is that the certificate describes the inputs as MS Steel Scrap‟. The inputs on which such Cenvat Credit has been availed have been classified under 73089010. These cover goods in the form of fabrication structures. The use of the term MS Steel Scrap‟ by the Chartered Engineer cannot discount the value of the certificate. The inputs procured have in fact been used in the fabrication of capital goods and hence are entitled to the CENVAT Credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Entitlement to Cenvat Credit on goods used in the manufacture of capital goods.

Analysis:
1. Factual Background: The appellant, engaged in manufacturing stainless steel and MS Ingots, availed Cenvat Credit on old structures and various structural items treated as capital goods. Lower authorities denied the credit, leading to the appeal.

2. Appellant's Arguments: The appellant contended that the disputed goods were used in fabricating capital goods within the factory, justifying Cenvat Credit. A Chartered Engineer certified the consumption of inputs for fabrication, supporting the claim.

3. Revenue's Arguments: The Revenue highlighted discrepancies in the Chartered Engineer's certificate, emphasizing the mention of "MS Steel Scrap" instead of the specific disputed items. They argued against accepting the certificate as substantial proof.

4. Judgment Analysis: The Tribunal examined whether the disputed goods, classified under CETH 73089010, were used in manufacturing capital goods. The Chartered Engineer's certificate, despite mentioning "MS Steel Scrap," certified the usage of inputs in fabricating capital goods.

5. Decision: The Tribunal held that the inputs, totaling 525.5 MT, were indeed used in fabricating capital goods, entitling the appellant to Cenvat Credit. Any excess credit availed would be recoverable. The Revenue failed to disprove the certificate's validity or present contradictory evidence.

6. Conclusion: The appeal was allowed, granting Cenvat Credit for the certified quantity of inputs. The judgment emphasized the importance of substantiating claims with evidence and upheld the appellant's entitlement based on the Chartered Engineer's certification.