Cenvat credit on refactory cement

[Yatin Bhopi]

We are manufacturer of organic chemicals. We have purchase refractory cement & blocks  (basically use in boiler at high temperature). As per rule 2 of CCR 2004 CENVAT credit is available on refectories and refractory materials.

My query is whether CENVAT credit is available on this refractory bocks and cement?  

[PAWAN KUMAR]

As per my understanding, Cenvat credit would be admissible as it is eligible capital goods as per rule 2(a)(A)(v) of CENVAT Credit Rules, 2004.

[YAGAY andSUN]

Dear Yatin,

Cement and steel have been specifically out of purview of availment of CENVAT credit since 2011 as amendment made in the definition of Inputs.

Regards

Team YAGAY & SUN

(Management & Indirect Tax Consultants)

[Yatin Bhopi]

Sir

It is correct that we can not avail CENVAT on cement and steel. but in this case product is also mentioned in the definition of  capital goods. further Basically refractory materials (refractory Cement/bricks/blocks) is use to absorb the high amount of temperature. In our case it is use in  Boiler / Chimnys. event though construction activity is excluded from input definition its stands in capital goods definition. Its confusing.

Pl express your views

[Rajagopalan Ranganathan]

Sir,

       In my opinion, view Mr. Pawan Kumar is correct.  High Alumina refractory cement is classifiable under sub-heading 2523 90 20 attracting CENVAT duty at the rate of 12 percent .Refrctory blocks/bricks are classifiable under heading 6902 attracting CENVAT duty at the rate of 12 percent . since these materials are covered by the definition of capital goods as refractories and refractory materials, you are eligible to avail the credit.  High Alumina Refractory cement is different in charactor and use and cannot be equated with ordinary cement.  Refractory cement is not used in construction of civil structures.

[Rajagopalan Ranganathan]

Sir,

       In my opinion, view of Mr. Pawan Kumar is correct.  High Alumina refractory cement is classifiable under sub-heading 2523 90 20 attracting CENVAT duty at the rate of 12 percent .Refrctory blocks/bricks are classifiable under heading 6902 attracting CENVAT duty at the rate of 12 percent . since these materials are covered by the definition of capital goods as refractories and refractory materials, you are eligible to avail the credit.  High Alumina Refractory cement is different in character and use and cannot be equated with ordinary cement.  Refractory cement is not used in construction of civil structures.

AI Summary

Cenvat credit eligibility for refractory materials classified as capital goods, allowing input tax credit for boiler components. CENVAT credit is addressed for refractory cement, bricks and blocks used in boilers and chimneys. Commentators argue these refractories qualify as capital goods under the CENVAT Credit Rules, 2004, and are functionally distinct from ordinary construction cement. Because refractory items are classified and used as plant components rather than in civil construction, the commentary concludes that input tax credit is available when they are properly classifiable as capital goods.