CESTAT Chennai: Cenvat Credit Allowed on Materials for Capital Goods

The Appellate Tribunal CESTAT Chennai ruled in favor of the appellant, allowing the admissibility of Cenvat Credit on materials like MS angles, plates, channels, aluminium coils, and asbestos used for making structures to support capital goods. The Tribunal referred to previous decisions and the High Court's judgment, holding that these materials are integral parts of capital goods and eligible for Cenvat credit. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential benefits under the law.

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Issues:
Admissibility of Cenvat Credit on MS angles, MS plates, channels, aluminium coils, asbestos, etc., used for making structures for support of capital goods.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai addressed the common issue of the admissibility of Cenvat Credit on various materials used for making structures to support capital goods. The period of dispute in all appeals was before 07.07.2009. The Tribunal noted that the issue had been previously settled by the Hon'ble High Court of Madras in the case of Thiru Arooran Sugars Ltd. vs. CESTAT, Chennai, where it was held that MS structurals supporting plant and machinery are integral parts of capital goods, making them eligible for Cenvat credit under Rule 2(a)(A) and 2(k) of the 2004 Rules.

The Tribunal referred to its own previous decisions, such as in the case of Thiru Arooran Sugars Ltd. and Commissioner of GST & Central Excise vs. Shree Ambika Sugars Ltd., where it was held that the credit availed on MS channels, plates, etc., used as structural items, is eligible for Cenvat credit. The Tribunal further clarified that based on the High Court's judgment, asbestos should also be considered a structural item along with MS materials, making the credit availed on asbestos admissible.

Ultimately, the Tribunal ruled in favor of the appellant in all cases, setting aside the impugned orders and allowing the appeals with any consequential benefits as per the law. The decision was pronounced in open court by the members of the Tribunal.

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