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of <h1>Successful Appeal on Cenvat Credit Eligibility Criteria</h1> <h3>M/s Sree Metaliks Ltd. Versus Commr. of Central Excise & S. Tax, BBSR II</h3> The Tribunal allowed the appellant's appeal regarding cenvat credit eligibility on various items, including structural steel used in fabrication, paints, ... CENVAT credit - input - M.S.Channel, M.S.Angels, M.S.Beams, Joists, plate etc. - Held that: - Hon’ble Allahabad High Court in the case of Commr. of Central Excise, Ghaziabad Vs. Samtel Colour Ltd. [2013 (1) TMI 586 - ALLAHABAD HIGH COURT], has allowed the cenvat credit on paints and building materials - in the case of Commr. of Central Excise, Coimbatore Vs. Jawahar Mills Ltd. [2001 (7) TMI 118 - SUPREME COURT OF INDIA], the cenvat credit was allowed on power cables, capacitors, control panels, which were used for high voltage transfer electricity. Penalty - Held that: - it appears that the adjudicating authority has mentioned that the same is on interpretation of law - penalty is hereby cancelled by taking a lenient view. Appeal allowed - decided in favor of appellant. Issues:Claim of cenvat credit on various items as input; Interpretation of law regarding cenvat credit on structural steel items used in fabrication; Allowance of cenvat credit on paints, building materials, power cables, capacitors, and control panels; Penalty imposition and its sustainability.Analysis:The appeal was filed against the Order-in-original passed by the Commissioner (Appeals) of Customs, Central Excise & S.Tax, Bhubaneswar II, for the period from June 2003 to August 2008. The appellant, engaged in manufacturing sponge iron, pig iron, M.S. Ingots, billets, and rolled products, claimed cenvat credit on items like M.S. Channel, M.S. Angels, M.S. Beams, Joists, plate, treating them as input, which the Department disallowed. The Tribunal referred to similar cases and observed that the user test is crucial in determining whether goods can be considered as capital goods. Citing the decision in CCE v. Rajasthan Spinning & Weaving Mills Ltd., the Tribunal held that structural steel items used in the fabrication of support structures for capital goods qualify as parts of relevant machines, falling within the ambit of 'Capital Goods' under the Cenvat Credit Rules. This led to the allowance of cenvat credit on the disputed items.The Tribunal also mentioned judgments where cenvat credit was allowed on paints, building materials, power cables, capacitors, and control panels, emphasizing the broad interpretation of the term 'input' in the context of cenvat credit eligibility. Regarding the penalty imposed, the adjudicating authority noted that it was based on interpretation of law. Given that the major demand for cenvat credit was allowed, the Tribunal took a lenient view and canceled the penalty, modifying the impugned order accordingly. Ultimately, the appeal by the appellant was allowed based on the above considerations.In conclusion, the Tribunal's judgment addressed the issues of cenvat credit eligibility for various items, the interpretation of law regarding cenvat credit on structural steel items, allowance of cenvat credit on different materials, and the sustainability of the penalty imposed. The decision provided detailed reasoning and legal references to support the allowance of cenvat credit and the cancellation of the penalty, ensuring a fair and just outcome for the appellant.
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