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of <h1>Tribunal Upheld Cenvat Credit for M.S. Pipes as Supporting Structures</h1> <h3>M/s CETEX PETROCHEMICALS LTD Versus COMMISSIONER OF CENTRAL EXCISE</h3> The Tribunal upheld the Commissioner (Appeals) decision allowing Cenvat credit only on M.S. Pipes, finding them used as supporting structures. The penalty ... Denial of Cenvat credit on various articles – Held that:- Following Commissioner of Central Excise Vs Rajasthan Spinning and Weaving Mills Ltd.[ 2010 (7) TMI 12 - SUPREME COURT OF INDIA ] – The items were used as supporting structures. It is also observed that these items are used to support the working platform around the equipment and hand rails for safety purposes – Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ] - cement and steel items used for laying foundation for building supporting structures cannot be treated either as 'inputs' or 'capital goods' in relation to the final goods - the items were used for supporting structures of the working platform – Penalty is not sustainable – Decided partly in favour of Assessee. Issues:- Eligibility of Cenvat credit on various iron and steel articles used in manufacturing processes.- Interpretation of rules regarding credit eligibility for supporting structures.- Application of judicial precedents on credit eligibility for supporting structures.- Consideration of user test for credit eligibility on iron and steel items.Analysis:1. Eligibility of Cenvat credit on iron and steel articles: The appellant, engaged in manufacturing MEK and SBA, appealed against the denial of Cenvat credit on iron and steel items used in construction. The original authority confirmed duty demand for a specific period, which was modified by the Commissioner (Appeals) to allow credit only on M.S. Pipes.2. Interpretation of rules for supporting structures: The appellant argued that the iron and steel items were used to support various machinery units and structures above ground level. The Commissioner (Appeals) based the decision on a Larger Bench ruling but allowed credit only on M.S. Pipes. The appellant cited a Tribunal decision allowing credit on similar items and highlighted that the disputed period was before a relevant rule amendment.3. Application of judicial precedents: The Revenue representative contended that the items were used for the foundation of the working platform, citing Supreme Court and High Court decisions that credit is not admissible for supporting structures. The Tribunal referred to various judgments, including one allowing credit based on the user test.4. Consideration of user test: The Tribunal analyzed the use of the iron and steel items as supporting structures for working platforms and safety purposes. It noted the Commissioner (Appeals) considered technical details and photographs to conclude that the items were indeed used for support.5. Final decision: The Tribunal found no reason to interfere with the Commissioner (Appeals) order, as the items were indeed used for supporting structures. However, it deemed the penalty unsustainable due to the interpretative nature of the case. Therefore, the penalty was set aside, and the appeal was disposed of accordingly.
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