2018 (4) TMI 828 - AT - Central Excise

Tribunal grants Cenvat credit on MS items for fabricating capital goods

The Tribunal allowed the appellant's appeal, granting eligibility for Cenvat credit on MS angles, plates, channels, and GI structurals used in fabricating ... Eligibility of Cenvat credit - accessories or peripherals of capital goods - fabrication of support structures for capital goods - platforms used for filtering raw material - distinction from civil structures - precedential consistency of tribunal and court decisionsEligibility of Cenvat credit - accessories or peripherals of capital goods - fabrication of support structures for capital goods - distinction from civil structures - Credit on MS angles, MS plates, MS channels and GI structurals used in fabricating accessory/support structures for capital goods was held eligible. - HELD THAT: - The Tribunal found that MS angles, plates, channels and GI structurals were essentially used in fabricating various accessory/support structures that make capital goods stable and functional. There was no finding that these items were used for civil structures. Relying on consistent decisions of Tribunals and Courts recognising credit where such items are employed in fabricating capital goods or their accessories, the impugned denial of credit was held unsustainable. The Tribunal therefore allowed Cenvat credit on these items. [Paras 2, 4]Credit allowed on MS angles, plates, channels and GI structurals used as accessories/supports of capital goods; impugned denial set aside.Eligibility of Cenvat credit - platforms used for filtering raw material - precedential consistency of tribunal and court decisions - Credit on platform used for filtering raw material was held eligible. - HELD THAT: - The Tribunal observed that the impugned order allowed credit on fabricated grating steel materials performing a similar filtering function, and there was no reason to distinguish and disallow credit on the platform used for filtering raw material. Having noted established legal position in earlier decisions allowing credit on items serving such operational functions in relation to capital goods, the Tribunal allowed credit on the platform. [Paras 2, 3, 4]Credit allowed on platform used for filtering raw material; impugned denial set aside.Final Conclusion: Impugned orders set aside to the extent contested; appeals allowed and Cenvat credit permitted on the specified MS items and platform as determined above. Issues:Eligibility of Cenvat credit on various MS sheets, angles, platform, and GI structurals.Analysis:The appeals were filed against the order of the Commissioner of Central Excise (Appeals) regarding the eligibility of Cenvat credit on specific items. The impugned orders allowed credit on various items but disallowed it on certain MS angles, platform, plates, channels, and GI structurals. The appellant argued that these items were essential for fabricating accessory/support structures for capital goods, making them eligible for credit. The Tribunal noted that there was no finding that these items were used for civil structures, and similar items had been allowed credit in previous cases.The Tribunal considered the usage of MS angles, plates, channels, and GI structurals in fabricating capital goods or their support structures as essential for stability and functionality. It was observed that the impugned order allowed credit on fabricated grating steel materials that served a similar purpose as the platform in question, leading to the conclusion that there was no basis to disallow credit on the platform. The appellant's explanation of using the platform for filtering raw materials was deemed valid based on the usage of similar materials for filtering purposes.The Tribunal referenced various decisions from Tribunals, High Courts, and the Supreme Court that supported allowing credit on MS items used for fabricating capital goods or their support structures. The legal position established through these cases was clear in favor of granting credit on such items. Considering the arguments presented and the legal precedents, the Tribunal found that the impugned orders were unsustainable. Consequently, the orders were set aside, and the appeals were allowed, granting the appellant the Cenvat credit on the disputed items. The decision was dictated and pronounced in open court.