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2020 (12) TMI 819 - CESTAT KOLKATACENVAT Credit - Capital goods - Inputs - Cement and Steel items such as Angles, Channels, Joist etc. - period from 2010-11 to 2012-13 - applicability of Explanation 2 to the definition of inputs inserted with effect from 7 July 2009 - HELD THAT:- The Appellant has taken us through the sample invoices, which can be traced to the line item wise details and wherefrom it is evident that the credit in respect of goods classifiable under Chapter 84, 85 & 90 of the CETA is also included within the disputed amount. The Appellant has also enclosed a Chartered Accountant Certificate dated 23 August 2016 certifying that the credit of ₹ 2,42,79,485/- pertains directly in respect of the plant, machinery, equipments and other goods squarely covered by the definition of capital goods. Therefore, cenvat credit of ₹ 2,42,79,485/- does not at all pertain to cement and steel items falling under Chapter 72/73 but explicitly covered by the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules and the demand to that extent does not survive. Applicability of Explanation 2 to the definition of inputs inserted with effect from 7 July 2009 - HELD THAT:- There is no blanket or absolute bar in claiming credit on the disputed items, unless used for the purposes specifically excluded in Explanation 2 to the definition of inputs. The Appellant had placed a Certificate dated 1 June 2015 from the Chartered Engineer, M/s. Associated Services in support of their contention that the disputed items were used in the fabrication of the storage tanks within the factory premises. The adjudicating authority has not disputed the said Certificate from an expert and does not disclose any basis either to come to the conclusion that the disputed items were used for the specifically excluded purposes. Infact, no independent enquiry has been made by the adjudicating authority while blindly following the contested audit objection for the period 2010-11 - the Certificate of the Chartered Engineer could not have been disregarded and it was incumbent upon the adjudicating authority to either contradict the Chartered Engineer’s Certificate or accept the same and the glossing over of the said Certificate was not in consonance with law. That Cement and Steel items when used in the fabrication of storage tanks is eligible for credit as inputs even after insertion of the Explanation 2 in July 2009 as has already been decided in favour of the assessee. The credit on the disputed items is available as inputs having been used in the fabrication of storage tanks - Appeal allowed - decided in favor of appellant.
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