2015 (10) TMI 1254 - AT - Central Excise

Appellate tribunal upholds Cenvat Credit for capital goods used in furnace fabrication.

The appellate tribunal upheld the decision of the Ld. Commissioner (A) in allowing Cenvat Credit amounting to Rs. 12,40,024 to the respondent. The ... Cenvat Credit - capital goods - inputs of capital goods - verification of records for admissibility of credit - definition of capital goods and inputs under Cenvat Credit Rules, 2004Cenvat Credit - capital goods - inputs of capital goods - verification of records for admissibility of credit - Cenvat credit on MS Angle, Channel, Beams, Pipes and Joints was correctly allowed where they were used in fabrication of an induction furnace treated as capital goods. - HELD THAT: - The respondent consistently replied to audit queries that the items in question were used for fabrication of an induction furnace, i.e., as capital goods. The Revenue did not controvert that factual position either in the show cause notice or during adjudication. The Commissioner (Appeals) examined and verified the records and, on that basis, allowed the Cenvat credit. The Tribunal finds that the Commissioner (Appeals) applied the correct factual and legal approach in verifying use of the goods as capital goods and in allowing credit accordingly, and there is no infirmity in that conclusion. [Paras 4]Appeal by Revenue dismissed and the allowance of Cenvat credit by the Commissioner (Appeals) upheld; cross-objection disposed of.Final Conclusion: The order of the Commissioner (Appeals) allowing Cenvat credit on the items used in fabrication of the induction furnace is affirmed and the Revenue's appeal is dismissed. Issues:- Appeal against the impugned order allowing Cenvat Credit on specific items- Verification of records and classification of items as capital goods or inputs- Challenge to the denial of Cenvat Credit and imposition of penalty- Adjudication by Ld. Commissioner (A) and subsequent appealAnalysis:The case involved an appeal by Revenue against an order allowing Cenvat Credit on items like MS Angle, Channel, Beams Pipes, Joints, etc. The respondent had availed the credit during a specific period and faced queries during an audit regarding the classification of these items as capital goods or inputs. The audit raised concerns that the items might not qualify as capital goods under the Cenvat Credit Rules 2004. A show cause notice was issued, leading to the denial of Cenvat Credit, confirmation of duty demand, interest imposition, and penalty. The respondent challenged this decision before the Ld. Commissioner (A), who examined the records and allowed the Cenvat Credit amounting to Rs. 12,40,024.During the proceedings, it was noted that the respondent had used the items for the fabrication of an induction furnace, categorizing them as capital goods. This assertion was not contested by Revenue during the show cause notice or adjudication. Consequently, the Ld. Commissioner (A) correctly verified the facts and granted the Cenvat Credit to the respondent. The appellate tribunal found no issues with the impugned order and dismissed the appeal filed by Revenue. The cross objection filed by the Respondent was also disposed of in the same judgment.