2022 (12) TMI 132 - AT - Central Excise

Tribunal grants cenvat credit for machinery foundation, rejects retrospective denial.

Hng Float Glass Ltd Versus C.C.E. & S.T. -Vadodara-II

Hng Float Glass Ltd Versus C.C.E. & S.T. -Vadodara-II - TMI Issues:Whether the appellant is entitled to cenvat credit for goods used in making foundation of machineries and support structures as capital goods under Rule 2(a) of Cenvat Credit Rules, 2004 for the period April 2008 to April 2010.Analysis:The appellant contended that denial of credit was based on an amendment excluding goods from the definition of inputs, but argued that the goods were used for manufacturing capital goods or as parts of machinery, making credit admissible. They cited the reversal of the VANDANA GLOBAL LTD. judgment by the Chhattisgarh High Court and the Gujarat High Court's decision in MUNDRA PORTS & SPECIAL ECONOMIC ZONE LTD. to support their claim. Post-July 2009, they claimed 50% credit, arguing that the credit accrued before the amendment and was admissible under capital goods. Several judgments were cited in support, including decisions involving GUJARAT AMBUJA CEMENT LTD., HINDUSTAN ZINC LTD., and others.The revenue reiterated the findings of the impugned order, which denied cenvat credit for goods used in machinery foundation and support structures due to the retrospective effect of an amendment in Rule 2(a). However, subsequent judgments, including the Chhattisgarh High Court's ruling in VANDANA GLOBAL LTD. and the Gujarat High Court's decision in MUNDRA PORTS & SPECIAL ECONOMIC ZONE LTD., held that the amendment was not applicable retrospectively. Therefore, the denial of cenvat credit based on the amendment was deemed incorrect.The Tribunal found that the denial of cenvat credit by the adjudicating authority was not legally sound. The amendment to Rule 2(a) was held inapplicable for the period before 07.07.2009, and for the period post this date, the credit was deemed accrued before the amendment, making it admissible. The appellant's claim under capital goods for parts and components used in support structures for machinery further supported the admissibility of credit. The Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief as per the law.In conclusion, the Tribunal held that the appellant was entitled to cenvat credit for goods used in machinery foundation and support structures as capital goods, based on the legal position established in relevant judgments, particularly those of the Chhattisgarh High Court and the Gujarat High Court.