Tribunal grants CENVAT credit for HR Plates & MS Channels used in capital goods production.

The Tribunal allowed the appeal, setting aside the impugned order that denied CENVAT credit on specific items like HR Plates and MS Channels. Relying on precedents from the Hon'ble High Courts of Gujarat and Madras, as well as Tribunal decisions, it was established that the disputed items were indeed eligible for credit as they were used in fabricating capital goods. The Tribunal emphasized the importance of adhering to established legal precedents in determining CENVAT credit eligibility, ultimately ruling in favor of the appellant.

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Issues:
Denial of CENVAT credit on HR Plates, Base Plates, MS Channels, MS plates, Angles etc. during July 2006 to December 2009.

Analysis:
The appeal was against Order-in-Original No. 26/2010 dated 22/12/2010, focusing on the denial of CENVAT credit on specific items. The Revenue contended that these items were neither inputs nor capital goods, hence ineligible for credit. However, the appellant argued that these items were utilized in fabricating capital goods, structural frameworks, and various systems. Upon reviewing the submissions and records, it was established that the items were indeed used for fabrication purposes, such as frame works for lift operation and furnace control room. The adjudicating authority's decision was based on a Tribunal's Larger Bench ruling in Vandana Global, which was later overturned by the Hon'ble High Court of Gujarat in the case of Mundra Port & SEZ Ltd Vs CCE [2015(39)STR 726].

Further, the Hon'ble High Court of Madras had ruled in specific cases that the disputed items were eligible for CENVAT credit, as evidenced by cases like Thiru Arooran Sugars Vs CESTAT [2017(355)ELT 373 (Mad)], Dalmia Cements Vs CESTAT [2016(341)ELT 102 (Mad)], and CCE Vs India Cements Ltd [2014-TIOL-1185-HC-Mad]. This judicial stance was also followed by the Tribunal in cases like Andhra Sugars Vs CCE Guntur [2016(343)ELT 1051(Tri-Hyd)] and Binjusaria Sponge & Iron power Pvt Ltd Vs CCE Hyderabad [2016-TIOL-1058-CESTAT-Hyderabad].

Consequently, considering the settled issue by higher judicial authorities and the inconsistency with the impugned order, the Tribunal found the order unsustainable. Therefore, the impugned order was set aside, and the appeal was allowed, emphasizing the importance of following established legal precedents for CENVAT credit eligibility.

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