Appellate Tribunal grants Cenvat credit for steel items used in capital goods fabrication

The appeal before the Appellate Tribunal challenged the denial of Cenvat credit to the appellant for steel items used in the fabrication of supporting structures for capital goods. The Member (Technical) ruled in favor of the appellant, citing previous decisions and High Court judgments, setting aside the order denying the Cenvat credit. The appeal was allowed, and the appellant succeeded in establishing the eligibility for Cenvat credit on the steel items.

---

---

Issues:
Cenvat credit eligibility on steel items used for fabrication of supporting structure for capital goods.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi challenged the order passed by the Commissioner (Appeals), Jaipur regarding the denial of Cenvat credit to the appellant for certain steel items used in the manufacture of TMT bars. The appellant considered these steel items as inputs for fabrication and installation of a Cooling bend and for repair and maintenance of plant and machinery. The department contended that the steel items were used for fabrication of supporting structures for capital goods, which were considered immovable property, thus not qualifying as inputs or capital goods under the Cenvat Credit Rules, 2004. The lower authorities supported this view based on a Larger Bench decision of the Tribunal in Vandana Global Ltd. case. The appellant challenged this denial of Cenvat credit through the present appeal.

During the hearing, the appellant's advocate cited several case laws, including Topworth Steels and Power Pvt. Ltd., Singhal Enterprises Pvt. Ltd., Lafarge India Pvt. Ltd., and Dalmia Bharat Sugar & Industries Ltd., in support of their argument. On the other hand, the Departmental Representative (DR) relied on a contrary judgment of the Allahabad High Court in the case of Daya Sugar Vs. CCE, Meerut-I. After considering the arguments from both sides, the Member (Technical) found that the issue had been consistently decided in favor of the appellants in previous decisions.

The Member noted that the issue had been settled in favor of the assessee by a majority of High Courts and the Supreme Court, particularly referring to the Jawahar Mills case. Consequently, the Member followed the decisions of the coordinate bench and ruled in favor of the appellants. As a result, the impugned order denying the Cenvat credit on the steel items was set aside, and the appeal was allowed.

---