2009 (7) TMI 383 - AT - Central Excise

Factory equipment qualifies for Cenvat credit under Chapter 84

COMMISSIONER OF CENTRAL EXCISE, RAIPUR Versus ASHOK ISPAT

The Tribunal held that beams, columns, and plates used in the factory as part of the crane operating system and induction furnace are eligible for Cenvat ... Capital goods credit - beams, columns and plates - SCN alleged that the beams, columns and plates have been used for building of civil structure, at the time of personal hearing before the Asstt. Commissioner and the Commissioner (Appeals), it was pleaded by the respondent that these items have been used as part of the crane operating system and induction furnace and this plea was accepted by the Asstt. Commissioner and subsequently by the Commissioner (Appeals). Even in the grounds of appeal in the Revenue’s appeal, this has not been disputed. The crane operating system and induction furnace falling under Chapter 84 are covered by the definition of capital goods and the items, in question, being parts and components of these capital goods are covered by the definition of capital goods. I, therefore, hold that the same are eligible for Cenvat credit. Issues:1. Whether beams, columns, and plates used in the factory are eligible for Cenvat credit as capital goods under Chapter 84 of Central Excise Tariff.Analysis:The appeal before the Appellate Tribunal CESTAT, New Delhi arose from a dispute regarding the eligibility of Cenvat credit for beams, columns, and plates used in a factory. The Asstt. Commissioner of Central Excise dropped the Cenvat credit demand, considering these items as parts of the Crane Operating System and Components of Induction Furnace, classifiable under Chapter 84. The Commissioner (Appeals) upheld this decision, leading to the Revenue's appeal before the Tribunal.The Revenue argued that beams, columns, and plates, falling under Chapter 73, do not qualify as capital goods. They contended that these items were used for structural support and should not be considered part of the crane or induction furnace. Reference was made to a High Court case stating that such items become immovable when affixed and do not satisfy the test of marketability for excise duty.On the other hand, the respondent emphasized that the items in question were indeed used as part of the crane and induction furnace, both falling under Chapter 84 as capital goods. They argued that these items should be considered parts of the capital goods, eligible for Cenvat credit, regardless of the specific chapter heading they fall under.After considering the submissions and records, the Tribunal found that the items in question were used as part of the crane operating system and induction furnace. Since these are classified under Chapter 84 as capital goods, the items were deemed eligible for Cenvat credit as parts and components of the capital goods. The Tribunal dismissed the Revenue's appeal, upholding the decision of the Asstt. Commissioner and the Commissioner (Appeals) regarding the eligibility of the items for Cenvat credit.In conclusion, the Tribunal's judgment affirmed that beams, columns, and plates used in the factory as parts of the crane operating system and induction furnace are eligible for Cenvat credit as capital goods under Chapter 84 of the Central Excise Tariff.