Appellate Tribunal allows CENVAT credit for iron & steel items in manufacturing process

The Appellate Tribunal CESTAT Bangalore upheld the availability of CENVAT credit for iron and steel items used in the manufacturing process for the erection and fabrication of a drying plant. The Tribunal rejected the Revenue's appeal, citing the use of such items in the fabrication of capital goods as permissible for claiming credit, supported by previous decisions. The lack of evidence from the Revenue regarding the specific use of the items as supporting structurals was crucial in the Tribunal's decision, leading to the rejection of the appeal and affirming the availability of CENVAT credit.

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Issues: Availability of CENVAT credit in respect of iron and steel items.

In the judgment by the Appellate Tribunal CESTAT Bangalore, the issue revolved around the availability of CENVAT credit in respect of iron and steel items used for the erection and fabrication of a drying plant in the manufacturing process. The Commissioner (Appeals) had allowed the credit based on the Chartered Engineer's certificate and previous Tribunal decisions, considering the use in the fabrication of capital goods. The Revenue, being aggrieved by the Commissioner's order, filed an appeal challenging the decision.

During the hearing, the Revenue failed to provide evidence that the iron and steel items were used as supporting structurals, which was a crucial point in the dispute. The Tribunal referred to the decision in the case of Vandana Global, highlighting that the use of such items in the fabrication of capital goods is permissible for claiming CENVAT credit. Additionally, the Tribunal noted a recent decision in the case of CC Guntur Vs Andhra Sugars Ltd where credit for identical items was allowed, further supporting the Respondent's position. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it, upholding the availability of CENVAT credit for the iron and steel items used in the manufacturing process.

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