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TMI Blog2023 (9) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Cenvat Credit Rules, 2004 (CCR). On verification of records for the period from December 2005 to March 2010, it was observed by the Department that the Appellant has availed credit on MS items which appeared to revenue as ineligible credit availed on capital goods. 3. During the period August, 2008 to March, 2010, there was a series of correspondence by the Department and replies filed by the Appellant/ Assessee wherein, the details of Cenvat credit taken as requested by the Revenue was furnished by the Appellant/Assessee. Thereafter, vide letter dated 01.04.2010, the Range Superintendent directed the Appellant to reverse the Cenvat credit for an amount of Rs.1,67,19,152/-. In response, the Appellant reversed the Cenvat credit for the said amount under intimation to Revenue, vide letter dated 07.04.2010. The Appellant was under firm belief that they were entitled to Cenvat credit and accordingly, submitted representation to the Assistant Commissioner providing details of usage of inputs/MS items along with the supporting invoices and also gave details of utilization in the fabrication of capital goods/ plant and machinery being letters dated 15.06.2010, 21.07.2010, 08.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant that they have documentary evidence in support of their claim that the items on which credit were taken, had been used in the manufacture of capital goods and given an opportunity they would be able to substantiate their claim in this regard. In view of this contention of the appellant, we are of the view that the matter needs to be remitted back to the adjudicating authority for fresh consideration. 5.2 In view of the above analysis, we set aside the impugned order and remand the matter back to the adjudicating authority for decision afresh. We direct the petitioner to produce evidence before the adjudicating authority, to substantiate its claim that the goods on which credit was taken were in fact used as inputs in the manufacture of capital goods, within a period of four weeks from the date of receipts of this order. The appellant is also at liberty to submit written statement of defence asserting any other point in support of its claim for CENVAT credit. Thereafter, the adjudicating authority shall cause verification of the claim of the appellant and pass a speaking order with respect to the entitlement of the appellant to the CENVAT credit. 6. Thus the appeal is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or distinct article or the capital goods themselves, as claimed by the Assessee. (vi) Further MS beams/joists were found to be used in preparation of stand to support plant and machinery and the inputs used as structure for support of capital goods are excluded as per Explanation 2. Other items like HR coils/ plates/sheets, MS coils/plates/flats used for repair of articles/capital goods are not eligible inputs that were used in repair and maintenance activity. (vii) Cenvat credit is available in respect of steel pipes and MS pipes used for movement of water, oil and gas and on HR Coils/plates, rough rolls, etc., which have been used for the purpose of patching/repair of the furnace, rolls used in furnace and rolling mill. 8. The Deputy Commissioner further observed that the Chartered Engineer who certified the use of MS items in the manufacture of capital goods was addressed to furnish the documents on which the report was based. In reply, the Chartered Engineer stated that he issued certification after due verification of invoices and drawings furnished by the Assessee and they have not furnished any other documents. Further observed that the Certificate of Chartered Engi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit taken is admissible or not. However, the primary responsibility is cast on the Assessee to avail credit only to the extent they are eligible. He relied on the allegation of SCN that the fact of availing Cenvat credit could be gathered only on detailed verification of records of the Assessee. From the returns, by no stretch of imagination can the department know the exact usage of the goods in question, notwithstanding the report of the audit parties, who are expected to conduct audit of the records and accounts on selective basis. 11. Assailing the Impugned Order, learned Counsel for the Appellant, inter alia, urges that readymade plant and machinery is not available for steel factories engaged in manufacture of TMT bars and MS billets. The same are fabricated at the site after procuring various inputs of iron, steel, etc., which fall under Chapter 72 & 73 of CETA. Such items are utilized in the factory premises for fabrication, inter alia, including processes like cutting, shaping, trimming and turning, without which the fabrication of such capital goods like furnace, rolling mill, support structures for furnace, control panel, trolley for transport of goods within the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er urged that concept of movable and immovable have been done away with under CCR, 2004 as Cenvat credit is available on items like storage tank, etc., which are normally not movable. 14. Thus, Cenvat credit on the inputs used for fabrication of capital goods is very much available. Further inputs used in repair and maintenance of the plant and machinery or capital goods is also available, as the definition provides for - used in or in relation to manufacture of final products, whether directly or indirectly. Thus, the Court below has erred in disallowing part of Cenvat credit on extraneous considerations not known to law. It is further urged that the ruling of the Larger Bench of the Tribunal in Vandana Global Ltd (supra) has been reversed by the Hon'ble High Court of Chattisgarh and have held that Cenvat credit is available on items like angels, joists, beams, bars, etc., which go into fabrication of structures embedded to earth, to be treated as inputs used in relation to the manufacture of final products, as inputs for capital goods. Hon'ble High Court had framed the following questions of law for decision: "4. In the light of the contents of the impugned order of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usher, kiln, hopper, etc., and without these structures the machinery could not be erected and would not function. It was also noticed that these are integral parts of the cement plant. Further fly ash handling system is a pollution control equipment, which is particularly mentioned in Rule 2(a)(A)(ii) of CCR. It was further observed that in respect of pollution control equipment because the ruling does not specify the tariff heading under which pollution control equipment should fall in. Further Appellant has established that these items were used for erection of capital goods and the same was held to be covered under the meaning of capital goods as per Rule 2(a)(A) of CCR. Further observed that CBEC has clarified that all parts, components and accessories which are to be used with the capital goods in (i) and (ii) of Rule 2(a)(A) and classifiable under any Chapter heading are eligible for availment of Cenvat credit. A plain reading of (iii) [components, spares and accessories of goods specified in (i) and (ii)] cannot lead to a different conclusion either. In India Cements Ltd, Hon'ble Madras High Court also referred to rulings of Hon'ble Supreme Court in Rajasthan Spinning and W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2017 dated 24.10.2017 have attained finality, as Revenue has not preferred any further Appeal. 19. Learned AR for revenue opposes the Appeal and relies on the Impugned Order. He further urges that taking of suo moto credit of the amount already reversed is not permissible. Assessee can at best file claim for refund. Reliance is placed on State of Karnataka vs Ecom Gill Coffee Trading Pvt Ltd [2023 (72) GSTL 134 (SC)] in the matter of GST. 20. Having considered the rival contentions, we find that the Appellant have received various items of MS steel, etc., in the factory of production. This fact is not disputed. Further revenue have found that the Appellant have fabricated various capital goods/Plant and machinery like pollution-control equipment, heating furnace, casting machine, coating machine, chimney, rolling machine, threading machine, Control Panel, etc., during the period under dispute. We further find that with the introduction of Cenvat credit rules 2004, capital goods as defined in rule 2(a)(A) of CCR includes items like pollution-control equipment, storage tank which are practically immovable. Thus, the concept of movable or immovable for allowing credit have been don ..... X X X X Extracts X X X X X X X X Extracts X X X X
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