2018 (2) TMI 1019 - AT - Central Excise

Tribunal Decision: Cenvat Credit on Construction Materials

Rav S. Steels Pvt. Ltd Versus CCCE & ST, Guntur

The Tribunal upheld the ineligibility of cenvat credit on cement used for the foundation but allowed the credit on other items based on the Chartered ... CENVAT credit - cement, HR plates, Angles, Channels, Beams, chequered plates and asbestos Cement Products (roofing sheets) etc. - Held that: - appellant have been producing the Chartered Engineer s certificate before the lower authorities and the said certificate indicates the use of items for fabrication of storage tanks, bunkers, conveyors, pollution control equipments and supporting equipments. In the absence of any contradictory certificate on record holding otherwise, that the inputs were used for fabrication of machinery, dismissal of certificate issued by Chartered Engineer by both the lower authorities that too summarily, seems to be not in consonance of law. Further, receipt of goods and thereafter used for fabrication as per Chartered Engineer certificate is not contested but only contested on a point that the inputs do not fall under the category of capital goods and hence not eligible for cenvat credit, will not carry any further of the Revenue. Appeal allowed - decided in favor of appellant. Issues:Eligibility of cenvat credit on various items including cement, HR plates, angles, channels, beams, chequered plates, and asbestos cement products.Analysis:The appeal concerned the eligibility of availing cenvat credit on items like cement, HR plates, angles, channels, beams, chequered plates, and asbestos cement products. The appellant claimed these credits for the fabrication of machinery. The adjudicating authority raised demands, alleging improper use of these items. The first appellate authority partially allowed the benefit. The appellant argued that a Chartered Engineer certificate detailed the usage of these items in the factory premises for fabrication purposes. Reference was made to judgments favoring cenvat credit eligibility on similar items used in the manufacture of capital goods by the High Courts. The Department contended that the Chartered Engineer certificate lacked specific details and evidence on the usage of these items for fabrication. The Tribunal found the availed credit on cement for foundation ineligible, requiring reversal. However, it noted that the Chartered Engineer certificate indicated proper usage of other items for fabrication, emphasizing the importance of accepting or contradicting such certificates. The Tribunal highlighted the judgments supporting the appellant's arguments and set aside the impugned order, except for the cement credit.In conclusion, the Tribunal upheld the ineligibility of cenvat credit on cement used for the foundation but allowed the credit on other items based on the Chartered Engineer certificate and supporting legal precedents. The Tribunal emphasized the significance of properly considering evidence like the certificate and following established legal principles in determining cenvat credit eligibility.