Appellant wins appeal for CENVAT credit on steel items used in chimney fabrication

The appellant successfully appealed against the denial of CENVAT credit on steel items used in fabrication for chimney height enhancement. The court ruled in favor of the appellant, allowing them to avail CENVAT credit on the steel items as they were integral to machinery function for manufacturing their final product, following a precedent set in a similar case before the High Court of Madras. The appellant's appeals were granted, and they were entitled to the CENVAT credit on the steel items.

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Issues Involved:
CENVAT credit denial on steel items used in fabrication for enhancement of chimney height.

Analysis:
The appellant appealed against orders denying CENVAT credit on steel items used in fabrication for enhancement of chimney height, claiming they become immovable property and thus not eligible for credit as capital goods. The issue was whether the appellant could avail CENVAT credit on these items per Rule 2(a) of CENVAT Credit Rules, 2004. The Hon'ble Member heard both parties and reviewed their submissions.

The judgment referred to a similar case before the Hon'ble High Court of Madras involving India Cements Ltd., where it was observed that steel items used for support structures, even if embedded to earth, are eligible for CENVAT credit as they are essential for machinery function. The court held that without the support structures, machinery cannot operate. Similarly, in the present case, the appellant used steel items for fabrication of support structures for bunkers, columns, and pollution control equipment, integral to machinery for manufacturing their final product. Relying on the decision in India Cements Ltd., the Hon'ble Member concluded that the appellant is entitled to avail CENVAT credit on the steel items in question.

In conclusion, the appeals filed by the appellant were allowed, granting them the right to avail CENVAT credit on the steel items used in fabrication for enhancement of chimney height. The judgment was delivered in Open Court on 26/10/2017.

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