2024 (4) TMI 671 - AT - Central Excise

CESTAT allows CENVAT credit recovery on inputs used for fabricating machinery and support structures

CESTAT Bangalore allowed appeal concerning CENVAT credit recovery on inputs used for fabricating machinery, support structures, and equipment in factory. ... Recovery of CENVAT Credit alongwith interest and penalty - input - goods used in the fabrication of various machineries, support structures, platforms for machineries and equipments etc. used in the factory - HELD THAT:- Undisputedly, the appellants during the relevant period used the aforesaid inputs in their factory in the fabrication / manufacture of various equipments, machineries, plants etc. and support structures holding the capital goods. The learned Commissioner in the impugned order following the judgment of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] decided the issue against the appellants holding that credit is not admissible on the aforesaid inputs used in the fabrication of various capital items. The impugned orders are devoid of merit and accordingly the same are set aside - Appeal allowed. Issues Involved:1. Entitlement to avail CENVAT credit on MS angles, MS channels, MS beams, MS joists, MS plates, etc. used in the fabrication of various machineries and support structures.Summary:Entitlement to CENVAT Credit:The appellants, manufacturers of Sponge Iron, MS Billets, and TMT bars, availed CENVAT credit on various inputs such as MS angles, MS channels, MS beams, MS joists, MS plates, etc. used in the factory for the manufacture of capital goods. The learned Commissioner, following the judgment of the Larger Bench of the Tribunal in the case of Vandana Global Ltd. Vs. CCE&C, Raipur [2010(253) ELT 440 (Tri. LB)], held that these items do not fall under the definition of inputs and confirmed the demand with interest and penalties.The appellants contended that the principle laid down in Vandana Global Ltd.'s case is no longer valid as it has been overruled by the Hon'ble High Court of Chhattisgarh in Vandana Global Ltd. Vs. CCE&C, Raipur [2018(16) GSTL 462 (Chhattisgarh)], which held that angles, joists, channels, beams, bars, etc. used in the fabrication of capital goods and supporting structures should be treated as inputs. They also cited judgments from the Hon'ble Gujarat High Court in Mundra Ports and Special Economic Zone Ltd. Vs. Commissioner [2015(39) STR 726 (Guj.)] and the Hon'ble High Court of Madras in Thiru Arooran Sugars Vs. CESTAT, Chennai [2017(355) ELT 373 (Mad.)].The Tribunal noted that the issue is covered by the judgment of the Hon'ble Chhattisgarh High Court in Vandana Global's case, which concluded that goods like angles, joists, beams, bars, plates, used in the fabrication of structures, are to be treated as inputs used in relation to their final products. The Tribunal also referred to the Larger Bench decision in Mangalam Cements Ltd. Vs. CCE, Jaipur-I [2018(360) ELT 737 (Tri. LB)], which held that cement and steel used in structural items are admissible as inputs.In light of these precedents, the Tribunal found that the impugned orders were devoid of merit and set them aside. The appeals were allowed with consequential relief to the appellants as per law.(Order pronounced in Open Court on 17.04.2024)