2009 (6) TMI 498 - AT - Central Excise

Cenvat Credit- The appellants herein had availed Cenvat credit of duty paid on the items like Steel and cement. It was the allegation of the Revenue in the Show Cause Notice that these items are used in the construction of civil structures and factory buildings and are not capital goods. Coming to such a conclusion Show Cause Notices were issued for the period July 2004 to December 2004 seeking to deny the Cenvat credit availed by the appellant on these items. In the light of the various decisions held that the Revenue has not produced any evidence against the order of the adjudicating authority. It is seen from the factual findings of the adjudicating authority that the cement or steel are used by the appellant for the purpose of constructing Iron/Coke Storage tank It is also seen from the records that there was an actual visit by the Assistant Commissioner to the factory premises of the appellant and vide his letter dated 27-12-2005 has confirmed that the said items were used only for the construction of Storage Tanks and Pollution Control equipments. In the case before us the factual aspect of the inputs viz. steel and cement having been used for the manufacture of storage tanks is not disputed by the Revenue. In the absence of any contrary evidence to the factual evidence as noticed by the adjudicating authority during the visit to the factory premises the impugned order is not sustainable. Accordingly in view of the above legal positions and facts of the case the impugned order is set aside and appeals are allowed with consequential relief if any.

Summary

Issues:
Whether the appellants are eligible to avail Cenvat credit on items like steel, cement, TMT bars, and other materials?

Analysis:
The case involved two appeals challenging Order-in-Appeal Nos. 82-83/2007-C.E., dated 30-5-2007, regarding the denial of Cenvat credit on items like steel and cement used in construction. The Revenue alleged these items were not capital goods but construction materials. The Adjudicating Authority dropped the proceedings, finding the items were used in the construction of storage tanks for storing raw materials. The Commissioner (Appeals) reversed this decision, holding the items were construction materials, not capital goods, and imposed a penalty. The appellants argued the items were used for manufacturing capital goods within the factory, citing relevant case law. They contended the Commissioner (Appeals) erred in considering the goods as non-excisable. The Tribunal found the items were used in the construction of storage tanks, supported by factual evidence, and were eligible for Cenvat credit as inputs used in manufacturing capital goods within the factory. The Tribunal set aside the Commissioner (Appeals) order, citing legal precedents and factual findings supporting the appellants' claim. The judgment emphasized the importance of factual evidence and legal interpretation in determining Cenvat credit eligibility on construction materials used for manufacturing capital goods within the factory premises.