2017 (2) TMI 1367 - HC - Central Excise

Court allows appeal under Section 35-G of Central Excise Act on Cenvat Credit entitlement

The Court allowed the appeal under Section 35-G of the Central Excise Act, 1944, regarding the entitlement of Cenvat Credit on goods used in fabrication. ... CENVAT Credit - M.S. Plates, M.S. Angles, M.S. Channels, Steel Sheets, Aluminum Sheets, Bars and Rods used in fabrication of tanks, fabrication of pipe line for boilers house, modification in the assessee’s mills, cane carrier side plates etc - Held that:- The issue is squarely covered by the decision in the case of COMMISSIONER CENTRAL EXCISE 7-A LUCKNOW VERSUS M/S BAJAJ HINDUSTAN LTD. [2017 (1) TMI 974 - ALLAHABAD HIGH COURT], where it was held that 'capital goods' as defined under Rule 2(b) of Rules, 2002 and 2(a) of Rules 2004, in substance, are pari-materia with the 'capital goods' specified in Rule 57-Q of Rules, 1944 and there is no substantial difference therein and 'Welding Electrodes' do not satisfy the requirement so as to constitute 'component' of items mentioned in column nos. 1 to 4 of table in Rule 57Q(1) of Rules, 1944 - credit rightly denied - appeal allowed - decided in favor of Revenue. Issues Involved:Appeal under Section 35-G of Central Excise Act, 1944 arising from a judgment and order passed by Customs, Excise and Service Tax Appellate Tribunal, New Delhi, and an order passed by Commissioner (Appeals), Custom and Central Excise Lucknow regarding the entitlement of Cenvat Credit on certain goods used in fabrication.Analysis:1. Entitlement of Cenvat Credit on Goods Used in Fabrication:The appeal raised a substantial question of law regarding the entitlement of Cenvat Credit on specific goods used in fabrication. The issue revolved around whether the Tribunal had erred in allowing Cenvat Credit on various items like M.S. Plates, M.S. Angles, M.S. Channels, Steel Sheets, Aluminum Sheets, Bars, and Rods used in fabrication activities. The appellant contended that the respondent-assessee was not entitled to Cenvat Credit on goods used for fabrication of structural supports to machinery as per Rule 2A of the Cenvat Credit Rules, 2004. The counsel for both parties referred to a previous judgment in a similar case to support their arguments.2. Precedent and Decision:The learned counsel for the parties cited a judgment from a previous case, Commissioner Central Excise, Lucknow Versus M/s Bajaj Hindustan Limited, to argue their positions. The judgment from the previous case seemed to have a significant influence on the decision in the current appeal. The Court, after considering the arguments and the precedent, concluded that the issue raised in the present appeal was covered by the judgment from the previous case. Consequently, the question regarding the entitlement of Cenvat Credit on the goods used in fabrication was answered in favor of the revenue and against the assessee.3. Final Decision:After thorough consideration of the arguments and the precedent cited, the Court allowed the appeal and set aside the judgment of the Tribunal that had taken a different view on the matter. The decision to set aside the Tribunal's judgment implied that the consequences of the appeal would follow accordingly. The judgment was clear in its directive, indicating a reversal of the Tribunal's decision based on the interpretation of the law and the precedent set by the previous case.This detailed analysis outlines the issues raised in the appeal, the arguments presented by the counsels, the influence of precedent on the decision, and the final outcome of the case, providing a comprehensive understanding of the legal judgment delivered by the High Court.