CENVAT CREDIT ON MS PLATE CHANNEL, Central Excise

[SHARMA NARAYAN]

Dear sir,

we are using ms plate channel beam angel sheets for making storage tank in our factory premises material is purchase by is directly so can we take cenvat credit in RG23A PART-II C

Posts / Replies

[MUKUND THAKKAR]

1 Dated: 21-1-2017 By:- Rajagopalan Ranganathan

Sir,

As per rule 2 (k) (B) of Cenvat Credit Rules, 2004-

any goods used for -

(a) construction or execution of works contract of a building or a civil structure or a part thereof; or

(b) laying of foundation or making of structures for support of capital goods,

except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Act are excluded from the definition of inputs. Therefore you are not eligible to avail the credit of duty paid on MS PLATE, ANGEL , CHANE, BEAM, COLUMN.

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2 Dated: 21-1-2017 By:- KASTURI SETHI

I support the views of Sh.Rajgopalan Ranganathan, Sir.

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3 Dated: 21-1-2017 By:- YAGAY AND SUN

Please check 2016 (1) TMI 917 - CESTAT NEW DELHI M/s. Monnet Ispat & Energy Ltd. Versus Commissioner of Central Excise, Raipur

2015 (1) TMI 804 - MADRAS HIGH COURT The Commissioner of Central Excise Versus M/s. India Cements Ltd.

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4 Dated: 22-1-2017 By:- SHARMA NARAYAN

Dear sir,

the same material we used to make storage tank in factory for manufacturing process

the can we take cenvat credit if yes in which register RG23A PART-II or RG 23A PART C

Mukesh

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5 Dated: 22-1-2017 By:- Rajagopalan Ranganathan

Sir,

As per rule 2 (a) A (vii) of Cenvat Credit Rules, 2004 storage tank is a capital goods. But I feel that this definition has been incorporated when you buy a ready made tank on payment of duty. If you construct a tank using the raw materials mentioned by you within your factory no duty is payable since you are captively consuming the tank. Therefore the question of availing the credit of duty paid either on the tank or the inputs consumed in the construction of the tank does not arise. From the narration made by you I infer that you are constructing the tank captively using the inputs mentioned by you.

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6 Dated: 23-1-2017 By:- SHARMA NARAYAN

Sir,

can we takc cenvat credit or not pls suggest

Mukesh

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1

[YAGAY AND SUN]

You are eligible to avail the CENVAT credit on the inputs which had been used in manufacturing of Storage Tank. Please check following judgment in this matter.

LSR Speciality Oils (P.) Ltd. Versus Commissioner of Central Excise = 2013 (1) TMI 731 - CESTAT MUMBAI

[YAGAY AND SUN]

In continution to our reply, As per explanation to Rule 2(k) of the CENVAT Credit Rules, 2004, storage tanks have been specified as capital goods and, therefore, inputs which are used in the manufacture of capital goods are also eligible for CENVAT credit. It is not in dispute that the steel items such as M.S. angles, H.R. sheets have not been used in the construction of storage tank which is a capital goods therefore, CENVAT credit on these M.S. angle and H.R. Sheet cannot be denied.

[Ganeshan Kalyani]

In my view the credit is eligible.

[Arunachalam siva]

Sir,

Storage tank is falling under definition of Capital goods.

Storage tank which you have built is if movable as such as without dismantling,

1. You avail CENVAT credit on those inputs in RG23A

2. You have to pay excise duty for the storage tank manufactured

3. You can avail CENVAT credit of ED paid for storage tank in RG23C

If the storage tank is not movable as such as;

1. Take credit on the subject material in RG23C

2. Dept will not claim excise duty on storage tank since storage tank become immovable and not excisable goods. In case of Triveni Engineering v. CCE AIR 2000 SC 2896 = 40 RLT 1 = 120 ELT 273 (SC), SC =  2000 (8) TMI 86 - SUPREME COURT OF INDIA decided as follows”the marketability test requires that the goods as such should be in a position to be taken to market and sold. If they have to be separated, the test is not satisfied. Thus, if machinery has to be dismantled before removal, it will not be goods”

The issue relating to cenvat credit eligibility on M.S. Items has been a subject matter of long dispute. Various decisions of the Tribunal, High Courts and Supreme Courts interpreted the provisions of Cenvat Credit Rules to decide on the eligibility of these items for credit.