2022 (7) TMI 1575 - AT - Central Excise

CENVAT Credit - capital goods/inputs - M.S. plates beams angles channels sheets etc. used for repair and replacement of damaged parts of cement plant and machinery clin pre-heater cement mill raw mill coal mill etc. - HELD THAT - CENVAT credit is allowable also as input as the items have been used admittedly (indirectly) as inputs in the factory of production for manufacture of dutiable finished goods. It is further noticed that these disallowance have been made by the Court below in view of the Larger Bench ruling of this Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE 2010 (4) TMI 133 - CESTAT NEW DELHI (LB) . This ruling has been overruled by the Hon ble High Court of Chhatisgarh in M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER CENTRAL EXCISE AND CUSTOMS CENTRAL EXCISE 2018 (5) TMI 305 - CHHATTISGARH HIGH COURT . The appellant further submitted that the issue in the present case is now squarely covered by Larger Bench ruling of this Tribunal in M/S. MANGLAM CEMENT LTD. VERSUS C.C.E. JAIPUR-I 2018 (3) TMI 1547 - CESTAT NEW DELHI . On the other hand Ld. DR supported the impugned order and contended that the Commissioner (Appeals) right disallowed credit of (Rs. 2, 50, 195/- Rs.3, 39, 873/-) or Rs.5, 90, 068/-. The larger Bench of this Tribunal in Mangalam Cement Ltd. where the issue before the larger Bench was whether on Cement and Steel items used for foundation for installation of machinery which is embedded to earth the assessee is entitled to avail Cenvat Credit on steel items in terms of Rule 2(k)/2(a) of the Cenvat Credit Rules 2004 or not the question has been decided in favour of the assessee. Conclusion - The appellants are entitled to cenvat credit on the items of iron and steel etc. Appeal allowed.

Summary

The Appellate Tribunal in this case considered the issue of eligibility for Cenvat credit on various items used for repair, maintenance, and fabrication in a manufacturing unit. The core legal questions addressed in the judgment were whether certain items such as M.S. plates, beams, angles, steel castings, asbestos sheets, nitrogen gas, PVC sheets, and aluminium conductors are eligible for Cenvat credit as inputs or capital goods. The Tribunal also examined whether the items used for erecting supporting structures qualify for Cenvat credit.The Tribunal referred to its earlier decision where it had ruled on similar issues and provided guidance on the eligibility of certain items for Cenvat credit. In the present case, the Commissioner (Appeals) had allowed Cenvat credit for certain items while disallowing credit for others based on the previous Tribunal ruling. The appellant argued that the items in question were used in the factory for production, repair, and maintenance of plant and machinery, thus qualifying for Cenvat credit.The Tribunal considered the arguments presented by both parties and reviewed relevant legal precedents. It noted that a Larger Bench ruling had overruled the previous Tribunal decision, providing clarity on the eligibility of certain items for Cenvat credit. The Tribunal cited the case of Mangalam Cement Ltd., where it was held that items like cement and steel used for foundation and machinery installation could be considered as inputs for Cenvat credit.Based on the interpretation of the definition of "input" and relevant precedents, the Tribunal concluded that the items in question, including iron and steel structures, steel castings, and aluminium conductors, were eligible for Cenvat credit. The Tribunal relied on the rulings of the Chattisgarh High Court and the Larger Bench decision in Mangalam Cement Ltd. to support its decision.In conclusion, the Tribunal allowed the appeals, set aside the impugned order, and held that the appellants were entitled to Cenvat credit on the specified items. The appellants were granted consequential benefits in accordance with the law. The judgment emphasized the importance of considering the use of items in relation to manufacturing processes when determining eligibility for Cenvat credit.