2022 (5) TMI 251 - AT - Central Excise

Appellant granted Cenvat credit for repair materials, crucial for plant maintenance.

The Tribunal ruled in favor of the appellant, allowing Cenvat credit for MS Angles, Channels, Beams, and Plates used as capital goods for repair and ... CENVAT Credit - capital goods - MS Angles, Channels, Beams and Plates - eligibility of credit on the basis of the use of said goods and the nature of the said goods - period 2008-09 and 2009-2010 - HELD THAT:- The appellant have not produced Chartered Engineer certificate however, they submitted the documents related to accounting of the goods and as per the Chartered Accountant certificate, the goods on which the credit is availed, have been accounted for and used for repair of plant and machinery - It is also observed that in the show cause notice, the use of the goods has been mentioned in the statement enclosed with the show cause notice. In this statement also it is observed that all the steel material was used in the plant and machinery. Though the appellant has not provided Chartered Engineer certificate which was not practicable as the use was taken place almost 7-8 years ago. Therefore, this can be accepted on the fact of use of goods from these documents. TMT Bar - HELD THAT:- It was used in the plant and machinery or platform made for the plant. Therefore, it is admissible for Cenvat credit. The similar issue has been considered in the appellant’s own case in M/S BODAL CHEMICALS LTD. VERSUS C.C.E. AHMEDABAD-I [2017 (9) TMI 147 - CESTAT AHMEDABAD] where it was held that these Items were used in the factory for repair and maintenance of the capital goods. The appellant is entitled for the Cenvat credit in respect of goods in question - appeal allowed - decided in favor of appellant. Issues:Entitlement to Cenvat credit for MS Angles, Channels, Beams, and Plates used as capital goods during 2008-09 and 2009-2010.Analysis:The judgment revolves around the issue of whether the appellant is entitled to Cenvat credit for the mentioned goods used as capital goods during a specific period. The appellant argues that the goods were utilized in the repair and maintenance of plant and machinery, making them eligible for credit. The Tribunal had previously directed the appellant to provide a Chartered Engineer certificate, which was not produced, leading to the denial of credit by the original adjudicating authority and the appellate authority.The Member (Judicial) carefully considered the submissions and records. The key issue was determining the Cenvat credit eligibility based on the use and nature of the goods. Despite the absence of a Chartered Engineer certificate, the appellant submitted documents related to the accounting of the goods. These documents, along with a Chartered Accountant certificate, indicated that the goods were used for repairing plant and machinery. The Tribunal found that the goods were indeed used for this purpose, as evidenced by the show cause notice and accounting records. The judgment also referenced previous cases where High Courts had ruled in favor of allowing Cenvat credit for goods used in repair and maintenance activities related to plant and machinery.The Tribunal highlighted that repair and maintenance activities are crucial for smooth manufacturing processes and directly impact the production of final goods. The judgment emphasized that the definition of 'input' in the Cenvat Credit Rules is broad and covers goods used directly or indirectly in the manufacture of final products. Ultimately, the Tribunal ruled in favor of the appellant, stating that the goods in question were used for repair and maintenance of capital goods, making them eligible for Cenvat credit. Consequently, the impugned order was set aside, and the appeal was allowed, providing the appellant with the entitled credit.