Tribunal rules storage tank qualifies as capital goods for cenvat credit

The Tribunal ruled in favor of the appellant, allowing the appeal and setting aside the Department's objection regarding the availment of cenvat credit on cement and TMT bars used for constructing a storage tank within the factory premises. The Tribunal determined that the storage tank qualifies as capital goods under the Cenvat Credit Rules, emphasizing that the amendments to the definition of input should operate prospectively.

---

---

Issues:
1. Availment of cenvat credit on cement and TMT bars used for construction of a storage tank within the factory premises.
2. Classification of storage tank as immovable property affecting cenvat credit eligibility.
3. Interpretation of Rule 2(k) of the Cenvat Credit Rules and the applicability of the Vandana Global Ltd. case decision.
4. Prospective application of amendments to the definition of input in the Cenvat Credit Rules.

Detailed Analysis:
1. The appellant availed cenvat credit on cement and TMT bars used for constructing a storage tank within the factory premises. The Department objected to this, arguing that as the storage tank is immovable, cenvat credit on these goods should not be available. The authorities relied on the Vandana Global Ltd. case decision to deny the cenvat benefit.

2. The appellant's advocate cited the Karnataka High Court judgment in the CCE Vs. SLR Steels Ltd. case, stating that the storage tank is considered capital goods under the Cenvat Credit Rules. The advocate also referenced the Gujarat High Court decision in the Mundra Ports & Special Economic Zone Ltd. case regarding the applicability of Rule 2(k) and the Vandana Global Ltd. case decision.

3. The Revenue's representative reiterated the Department's stance that as the storage tank becomes attached to the earth after construction, it should not be considered goods eligible for cenvat credit. The Tribunal examined both sides' arguments and the records presented.

4. The Tribunal referred to the Karnataka High Court judgment, which held that the storage tank qualifies as capital goods under the Cenvat Credit Rules. The Tribunal also noted that the amendment to the definition of input was not clarificatory and should operate prospectively. Citing the Gujarat High Court decision, the Tribunal emphasized that new provisions added by the Legislature should be considered as amendments and applied prospectively.

In conclusion, the Tribunal found no merit in the Department's objection and set aside the impugned order, allowing the appeal in favor of the appellant with any consequential relief as per law.

---