Tribunal Grants Appeals, Confirms Cenvat Credit for MS Items in Capital Goods Fabrication Aligned with Recent Ruling.

The Tribunal allowed the Appeals, setting aside the Impugned Orders and granting the Appellant consequential benefits. It affirmed the availability of Cenvat credit on MS items used for the fabrication of capital goods in manufacturing, referencing the Chhattisgarh HC's decision on the prospective effect of Rule 2(k) amendment of CCR. Revenue did not dispute the usage of MS items in production.

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Issues:
Whether the Appellant rightly took Cenvat credit on MS items used for fabrication and structural support.

Analysis:
The Appellant, engaged in cement manufacturing, availed Cenvat credit on various MS items for constructing a new cement plant. Revenue alleged the Appellant availed credit on ineligible MS items used in construction, contending they were not components of capital goods or inputs. SCNs were issued post-2009 proposing disallowance of credit, leading to OIO disallowing credit and imposing penalties. The Appellant challenged this disallowance.

The Tribunal noted the Larger Bench ruling in Vandana Global Ltd vs CCE, Raipur, disallowing credit on MS items for support structures. However, the Chattisgarh High Court reversed this ruling, holding the amendment to Rule 2(k) of CCR had prospective effect. Citing judgments like Thiru Arooran Sugars vs CESTAT, Chennai, and Mundra Ports & SEZ Ltd vs Commissioner, the Tribunal held Cenvat credit is available on inputs used for fabrication of capital goods for manufacturing dutiable finished goods.

Referring to India Cements Ltd vs CCE, Chennai, and Bhavya Cements Ltd vs CC, CE & ST, Guntur, the Tribunal affirmed the availability of Cenvat credit on MS items used for fabrication. Revenue did not dispute the receipt and use of MS items in production. Consequently, the Tribunal allowed the Appeals, setting aside the Impugned Orders and granting the Appellant consequential benefits as per law.

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