2016 (9) TMI 85 - AT - Central Excise

Tribunal Grants CENVAT Credit for Steel Items in Manufacturing Process

The Tribunal allowed the appeal in favor of the Appellant, granting CENVAT credit on specific steel items used in the manufacturing process, including MS ... Cenvat credit - 'MS Flats', 'MS Sheets', 'MS Bolt' and 'MS Plate Chequered' used in the manufacturing unit - Held that:- the issue is no longer res integra and has been settled in favour by a plethora of judgments, including that of CCE & C, Visakhapatnam Vs Rastriya Ispat Nigam Ltd., [2011 (4) TMI 1098 - ANDHRA PRADESH HIGH COURT] where the Hon'ble High Court inter-alia held that credit on steel sheets used in repair and maintainance of capital goods is eligible for credit. Even this very Bench, in the case of CCE & ST, Visakhapatnam vs HPCL [2016 (6) TMI 606 - CESTAT HYDERABAD] and also in the case of Orient Cements Vs CCE & ST, Hyderabad-I has also echoed this view and held that credit of duty on MS items (HR plates/sheets) used for repair and maintainence is admissible. Therefore, by following the ratio laid down in the aforesaid judgments, the appeal is allowed in toto. - Decided in favour of appellant with consequential relief Issues involved:1. Eligibility of CENVAT credit on MS Flats, Sheets, Bolts, and Plates.2. Classification of steel items as capital goods.3. Admissibility of CENVAT credit on items used for repair and maintenance.4. Consideration of Chartered Engineer's Certificate as evidence.Detailed Analysis:1. The issue in this case revolves around the eligibility of CENVAT credit on specific steel items, namely MS Flats, Sheets, Bolts, and Plates used in the manufacturing process. The Show Cause Notice contended that these items did not qualify as capital goods under Rule 2(a) of the CENVAT Credit Rules, 2004, as they were classified as structural steel items falling under Chapter 72 and 73 of the Central Excise Tariff Act, 1985. The Order-in-Appeal upheld the demand for CENVAT credit, interest, and penalty, emphasizing that the items were not components or accessories of specified capital goods.2. The classification of steel items as capital goods is crucial in determining their eligibility for CENVAT credit. The Appellant argued that the matter had been settled in their favor by various judgments, including those of the High Court and previous Tribunal decisions. They cited precedents where credit on steel sheets used for repair and maintenance of capital goods was deemed admissible. The Tribunal concurred with this view, citing previous judgments, and allowed the appeal in favor of the Appellant, granting consequential benefits as per the law.3. Another aspect of the case involved the admissibility of CENVAT credit on items used for repair and maintenance. The Order-in-Appeal contended that the goods used for such purposes were not eligible for credit, relying on a specific decision. However, the Appellant's representative argued that the issue had been addressed in previous judgments, including a decision by the same Tribunal bench in a related case. The Tribunal noted the lack of discussion on the ineligibility of MS chequered plates in the previous orders and emphasized the settled nature of the eligibility of credit on certain steel items used for repair and maintenance.4. The consideration of the Chartered Engineer's Certificate as evidence was also raised in the appeal. The Order-in-Appeal highlighted that the certificate was not produced before the Original Authority, leading to its dismissal as evidence. However, the Appellant's representative contended that the matter was covered by relevant judgments and cited a specific order by the same Tribunal bench in a similar case. Ultimately, the Tribunal focused on the eligibility of CENVAT credit on the steel items in question based on established legal principles and precedents, leading to a favorable decision for the Appellant.