2023 (10) TMI 870 - AT - Central Excise

Reversal of CENVAT Credit - Ms Angles, MS Beam and other MS Items which have gone into the capital goods used in factory premises - inputs used in the High Mast Tower on account of capital goods - address has by mistake been given as HPCL, Mumbai (their Head Office) - HELD THAT - It is seen from the Certificate issued by the Chartered Engineer that the MS Items have been used within the factory premises for completion of the EPC Project within the factory premises. The Tribunal in the case of M/S. MADRAS CEMENTS LTD. VERSUS CCE, HYDERABAD 2016 (6) TMI 761 - CESTAT HYDERABAD has held credit is admissible on MS items used for fabrication of structural supports. Such supports and fixation is necessary for functioning of the plant/machinery/equipment without movement and vibration without which the process of manufacturing could not be done. In the case of COMMISSIONER OF C. EX., TIRUNELVELI VERSUS INDIA CEMENTS LTD. 2006 (1) TMI 445 - CESTAT, CHENNAI , the Tribunal has held The ratio arrived at in various decisions/judgments referred to by the ld. Counsel for the Respondents has made it clear that the components spares etc. used for Generator set, cursher plant, conveyor system etc. are eligible capital equipment and credit in respect of them is admissible under Rule 57Q(1) of the C.E. Rules, 1944. In the case of COMMISSIONER OF C. EX., TIRUNELVELI VERSUS INDIA CEMENTS LTD. 2005 (8) TMI 274 - CESTAT, CHENNAI , the Tribunal has held there is no dispute of the fact that the capital goods in question were used as parts/components of cement-manufacturing plant. During the material period, parts and components of plant were recognised as eligible capital goods for Modvat credit under clause (b) of Explanation (1) to Sub-rule (1) of Rule 57Q of the Central Excise Rules, 1944. The lower appellate authority has rightly allowed capital goods credit to the respondents. Following the ratio of the cited case law, the Cenvat Credit of Rs.62,82,025/- on MS Angles, MS Beam and other items on which the Cenvat Credit has taken is allowed. On the same ground, the Cenvat Credit of Rs.26,201/- taken on inputs used for fabrication of High Mast Tower is allowed. In respect of Rs.10,146/- since the Invoice has been made in the name of HPCL, Mumbai (the Head office), this is only a clerical error and does not prevent the Appellant from taking the Cenvat Credit, since there is no dispute about their usage by the Appellant - In respect of Radha Krishna Transport, there is no necessity of the transporter to indicate the Service Tax Registration Number. As a matter of fact, in case of GTA services, the Service Tax has to be paid on Reverse Charge basis by the recipient of the service. Therefore, the Cenvat Credit on 33,900/- is allowed. The impugned order towards the confirmed demands along with interest and penalties set aside - appeal allowed.

Summary

Issues involved:
The issue involves the eligibility of Cenvat Credit on various items taken by the Appellant during a specific period, leading to a Show Cause Notice seeking reversal of a substantial amount. The Adjudicating Authority allowed a partial credit, resulting in a confirmed demand along with interest and penalty, which the Appellant is challenging.

Details of the judgment:

Issue 1: Eligibility of Cenvat Credit on MS Angles and other items used in capital goods:
The Appellant claimed Cenvat Credit on MS Angles, MS Beam, and other items used in the manufacture of capital goods within the factory premises. The Chartered Engineer's Certificate confirmed the usage of these items for the EPC Project. The Appellant also cited relevant case laws supporting the admissibility of Cenvat Credit on such items. The Tribunal referred to precedents like Madras Cement Vs. CCE, Hyderabad and CCE Vs. India Cement Ltd., emphasizing the eligibility of MS items for Cenvat Credit when used for fabrication of support structures for capital goods.

Issue 2: Clerical error in Invoice for Service Tax payment:
Regarding a clerical error in an invoice where the address was mistakenly mentioned as HPCL, Mumbai, the Appellant argued that this should not hinder them from claiming Cenvat Credit as there was no dispute about the usage. The Tribunal acknowledged this error as a clerical one and allowed the Appellant to claim the credit.

Issue 3: Service Tax Registration for Transportation services:
The Appellant also contested the denial of Cenvat Credit on transportation services from M/s Radha Krishna Transport due to the absence of Service Tax registration in the invoices. The Appellant argued that in the case of GTA services, the recipient pays Service Tax on a Reverse Charge basis, and the transporter is not required to mention the Service Tax Registration Number. The Tribunal agreed with this argument and allowed the Cenvat Credit on these services.

Conclusion:
Based on the evidence presented and the legal arguments made, the Tribunal allowed the Cenvat Credit on the contested items, setting aside the confirmed demands, interest, and penalties. The Appellant's appeal was granted with consequential relief as per the law.