2016 (12) TMI 536 - AT - Central Excise

Tribunal grants cenvat credit for essential manufacturing items under Rule 2(b)(ii)

The Tribunal allowed cenvat credit for items used in manufacturing, such as channels, angles, MS Sheets, Plates, and Joist, which were deemed essential ... Denial of CENVAT credit - channels, angles, MS Sheets, Plates, Joist used for purpose of manufacture - denial on the ground that the products do not qualify as capital goods as per Rule 2(b) (ii) of the Cenvat Credit Rules, 2004 - Held that: - As the appellant is able to show that the items Channel, Angle, Plate, MS Plate, angle under CTH 72163100, 72162100, 72085110, 72162100 and 72162100 respectively were used as inputs for fabrication or repair of capital goods, therefore, cenvat credit on these items are allowed and there is no remarks were made by the Chief Engineer on items HR plates and Plate under CTH 72085210 and 72085110 respectively, therefore, cenvat credit on these items is dis-allowed - appeal disposed off - decided partly in favor of appellant-assessee. Issues: Cenvat credit eligibility for certain items used in manufacturing.Analysis:The appellant contested the disallowance of cenvat credit on channels, angles, MS Sheets, Plates, and Joist used for manufacturing, citing Rule 2(b)(ii) of the Cenvat Credit Rules, 2004. The appellant presented a table illustrating the use of specific items for repair of capital goods, emphasizing their role as inputs for fabrication or repair of capital goods. The Tribunal noted that items listed as S.No. 1, 2, 4, 5, and 6 were indeed utilized for fabrication or repair of capital goods, thereby justifying the allowance of cenvat credit for these items. Conversely, items mentioned in S.No. 3 and 7 did not have remarks from the Chief Engineer, leading to the disallowance of cenvat credit for those specific items. Consequently, the Tribunal disposed of the appeal based on the above findings, affirming the eligibility of cenvat credit for certain items used in the manufacturing process.