Appellant allowed Cenvat credit for Cement & Steel in Silo construction. Precedents support storage tank materials as cenvatable.

The appellant was entitled to avail Cenvat credit for duty paid on Cement and Steel Parts used in constructing a Silo for storing cement bags. The judge relied on legal precedents establishing that materials used for constructing storage tanks are admissible as cenvatable inputs. The judge rejected the Revenue's attempt to distinguish the case based on the type of stored material, emphasizing that storage facilities for any goods are essential for business operations. Consequently, the judge allowed the appeal, set aside the lower authorities' decisions denying credit, and granted consequential relief.

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Issues involved: Whether the appellant is entitled to avail Cenvat credit of duty paid on Cement and Steel Pars used for the construction of Silo for storing cement bags.

Analysis:

Issue 1:Entitlement to Cenvat credit
The main issue in the present appeal was whether the appellant could avail Cenvat credit of duty paid on Cement and Steel Pars used for constructing a Silo for storing cement bags. The credit availed by the appellant in March 2009 was denied on the grounds that the construction of Silos was not considered an activity connected with their business to allow Cenvat credit on the duty paid.

Issue 2:Precedents and legal decisions
The judge referred to several legal decisions to support the appellant's claim, including Bannari Amman Sugars Ltd. v. CCE, Mysore, CCE, Bangalore-II v. SLR Steels Ltd., CCE, Mysore v. ICL Sugars Ltd., CCE, Belgaum v. Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit, Sai Samhita Storages P. Ltd. v. CC & CE, Visakhapatnam-II, CCE, Visakhapatnam-II v. Sai Sahmita Storages (P) Ltd., and CCE, Jalandhar v. Pioneer Agro Extracts Ltd. These decisions established that cements and steel items used for constructing storage tanks are admissible as cenvatable inputs.

Issue 3:Argument against the distinction made by Revenue
The Revenue attempted to differentiate the present case from the cited legal decisions by highlighting that the silo in question was meant for storing cement bags, unlike the storage tanks in the previous cases that stored liquid waste. However, the judge found no merit in this distinction. The judge emphasized that storage facilities, whether for liquids or solid goods, serve the same purpose of storage and are essential for the smooth operation of a factory. Therefore, the construction of such facilities should be considered connected with business activity, and the materials used should not be denied Cenvat credit.

Conclusion:
In conclusion, the judge held that the construction of the Silo for storing cement bags was indeed connected with the appellant's business activity. By following the established legal precedents, the judge found no merit in the decisions of the lower authorities that denied the Cenvat credit. Consequently, the impugned orders were set aside, and the appeal was allowed with consequential relief.

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