2019 (2) TMI 1227 - AT - Central Excise

Appeal partially allowed for cenvat credit on steel materials in plant structure

M/s Garden Silk Mills Ltd Versus C.C.E. & S.T., - Surat-i

The Tribunal allowed the appeal in part, ruling that cenvat credit for steel materials used in the structure of plant and machinery was admissible based ... CENVAT Credit - inputs - steel materials such as Angels, Channels, TMT Bars, etc. - Held that:- As regard steel material used for structure of plant and machinery, the credit is admissible as per Hon’ble Chhattisgarh High Court judgment in the case of M/s Vandana Global Ltd [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT], particularly for the reason that the exclusion in respect of steel material for support structure was brought under definition of input w.e.f. 07.07.2009 whereas period in the present case is prior to 07.07.2009. Material used for factory shed - Held that:- The cenvat credit is not admissible as per the judgment of Hon’ble Chhattisgarh High Court who allowed the cenvat credit only in respect of steel material used for support structure. Since the fact of use of material has not been verified by the adjudicating authority, the matter needs to be remanded to the adjudicating authority. Appeal allowed by way of remand. Issues:Whether the appellant is entitled to cenvat credit for steel materials like Angels, Channels, TMT Bars, etc.Analysis:The appellant, represented by Sh. W. Christian, argued that the denial of cenvat credit by the adjudicating authority was based on a principle established by a Larger Bench decision in the case of M/s Vandana Global Ltd. Vs. CCE. However, Sh. Christian pointed out that the Larger Bench decision was overturned by the Hon'ble Chhattisgarh High Court in the same case, stating that before 07.07.2009, all the relevant inputs were eligible for cenvat credit. He cited various judgments to support his argument. Additionally, he emphasized that the steel goods in question were used in constructing support structures for plant and machinery and factory sheds. He also contended that the demand was time-barred as the period in question was from March 2006 to April 2009, and the show cause notice was issued on 11.03.2011.The Assistant Commissioner (AR), Sh. T.K. Sikdar, representing the Revenue, reiterated the findings of the impugned order. He argued that the judgment of the Hon'ble Chhattisgarh High Court only applied to steel materials used for supporting plant and machinery structures, not for factory sheds. He highlighted that this distinction had not been verified by the lower authorities.After considering the submissions from both sides, the Tribunal found that cenvat credit for steel materials used in the structure of plant and machinery was admissible based on the Hon'ble Chhattisgarh High Court judgment in the case of M/s Vandana Steel Ltd. However, the Tribunal noted that the appellant had admitted that the steel materials were also used for erecting and fabricating the factory shed. Since there was no verification regarding the allocation of materials between support structures and factory sheds, the Tribunal ruled that cenvat credit for materials used in the factory shed was not admissible based on the High Court judgment. Consequently, the matter was remanded to the adjudicating authority for further verification and a fresh order. The appeal was allowed by way of remand for the adjudicating authority to re-examine the facts and make a new decision.