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2018 (9) TMI 1987 - AT - Central ExciseCENVAT Credit - inputs used in the manufacture of supporting structures of capital goods - Angles, Channels, Chequired Coils, CTD Bar, GC Sheet, HR Sheet/Plate, Joist, MS Beam, MS Flat, MS Rod, MS Rounds, Plate & TMT Bar etc. - HELD THAT:- It is observed from the SCN that the steel materials have been used to make gigantic steel structures to participate in the manufacturing process of Sponge Iron and M.S. Billet carried out by them and without them the manufacture process could not be completed - The issue to be decided in this appeal is regarding availability of Cenvat credit on various structural items such as Angles, Channels, Chequired Coils, CTD Bar, GC Sheet, HR Sheet/Plate, Joist, MS Beam, MS Flat, MS Rod, MS Rounds, Plate & TMT Bar etc. which have been used in making support structures of the Capital Goods. The Learned Commissioner (Appeals) has decided the appeal in favour of the Department by relying upon the decision of the Larger Bench of the Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)]. The aforesaid decision of the Larger Bench was considered by the Hon’ble Court of Gujrat in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS [2015 (5) TMI 663 - GUJARAT HIGH COURT] wherein it was observed that the amendment made on 7.7.2009 cannot be held to be retrospective and as such applicable only prospectively. The controversy can be laid to rest by making a reference to the decision of the Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT], wherein the Hon’ble Supreme Court has considered an identical issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgment, the Apex Court has referred to the “user test” evolved by the Apex Court in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [2001 (7) TMI 118 - SUPREME COURT], which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the “user test” to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods - the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of ‘Capital Goods’ includes, components, spares and accessories of such capital goods. Accordingly, applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat credit. Appeal allowed - decided in favor of appellant.
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