Appellate Tribunal allows Cenvat credit for prefabricated constructions in cold storage room.

The Appellate Tribunal CESTAT BANGALORE ruled in favor of the appellant, allowing Cenvat credit on prefabricated constructions used for a cold storage room in their factory. The Tribunal determined that the prefabricated materials were essential inputs for the capital goods, recognizing their role in maintaining required temperatures for the cold storage room's machinery. As a result, the Tribunal waived the pre-deposit amounts and stayed recovery pending appeal resolution, overturning the Commissioner (Appeals) decision to deny the credit.

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Issues: Denial of Cenvat credit on prefabricated constructions

In the judgment by Appellate Tribunal CESTAT BANGALORE, the issue revolved around the denial of Cenvat credit on prefabricated constructions purchased by the appellant for the erection of a cold storage room in their factory to store ice cream. The Revenue contended that the credit was not admissible, leading to the issuance of a show cause notice. The Adjudicating Authority initially dropped the proceedings, but the Revenue appealed to the Commissioner (Appeals), who reversed the decision and demanded the reversal of the Cenvat credit. The Tribunal, after considering the submissions from both sides, found that the prefabricated building materials were essential inputs for the capital goods (cold storage room) used in the factory. The Tribunal acknowledged that the cold storage room required specific machinery to maintain temperatures at or below 0^0C, and therefore, the prefabricated structures could be considered inputs for the capital goods. Consequently, the Tribunal allowed the waiver of the pre-deposit amounts adjudged by the Commissioner (Appeals) and stayed the recovery until the appeal's disposal.

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