Cenvat Credit

[srinivasan.K kuppuswamy]

Sirs,

Please refer my query regarding cenvat credit on Steel structures used for sand plant during last week. Though I have received various favorable opinions from you, finally received letter from Central Excise as follows:-

During the course of audit,it was noticed that the assessee wrongly availed cenvat credit on plant structure items viz column, beam, ms plate, ms pipe, ss plate etc which are used for construction of shed which is not eligible for credit.As per the definition of capital goods given under Rule 2 of the CCR te above said items are not falling under the definition of capital goods as they are not forming part of capital goods.

( The referred material used for sand plant such as ms duct,elevator etc and in turn for manufacture of sand mould and the final out put is castings) and not for construction of shed as mentioned in the excise letter.

A draft reply for the above para will be immensely useful.Request your valuable reply.

Regards

K Srinivasan

[YAGAY andSUN]

Dear Srinivasan,

We had discussed this matter at length. The legal position is settled in this matter and is in favour of assesse. It would be better that you must consult this matter with an Expert/Consultant/Advocate, with all relevant material facts for drafting a suitable reply against the impugned Audit Para or SCN issued by the Department.

If you deem fit, we can help you out in this matter. We charge nominal fees for providing such services.

Regards

Team YAGAY and SUN

[srinivasan.K kuppuswamy]

Dear Sir,

Thank you for your continuous advice/support/guidance.

Could you please send the legal position is settled in this matter and is in favour of assesse would be immensely helpful.

Regards

K Srinivasan

[YAGAY andSUN]

Dear K Srinivasan,

It seems that you had not paid attention to our earlier discussions on this matter. We had discussed this matter at length. Please also do not start a new discussion on the same matter where the reply with the settled legal position had already been submitted by referring the relevant judgments duly pronounced by the Hon'ble High Court and Supreme Court.

We do share our knowledge, experience for betterment of Industry, free of cost on Tax Management India Portal and it takes time to provide same reply on repetitive queries.

Please refer our earlier replies to your query. Issue ID = 107069 Total Reply: 16

However, vide these two judgments, legal position in this matter has been settled and is in assessee's favour.

1. CCE, Jaipur Vs. Rajasthan Spinning and Weaving Mills Ltd.2010 (7) TMI 12 - Supreme Court of India
2. The Commissioner of Central Excise and Service Tax Versus M/s. India Cements Ltd.- 2014 (7) TMI 881 - Madras High Court.

Further, it is advisable that you should prepare a detailed reply and counter each and every allegation levied by the Department (Including countering the disallowance of CENVAT credit, Limitation if any, bonafide believe, levy of Interest and Imposing penalty on your organization and on the key personnel, if any).

We hope after submitting the facts, contentions, clarifications and the settled legal position, Department will surely set aside the demand raised against your organization.

You may also contact us, in case, you need our services for drafting of reply. We charge reasonable fee for providing such services.

We remain.

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

Mobile:- 09818131923

E-Mail:- yagaysun@india.com

AI Summary

Cenvat credit eligibility: structural plant components can qualify when forming part of manufacturing plant, prepare detailed reply citing settled precedents. Cenvat credit on structural items (columns, beams, MS plates, pipes) is disputed by the department as not qualifying as capital goods under Rule 2, the assessee contends those items are part of sand plant machinery used in manufacturing castings and advisers recommend preparing a detailed, precedent based reply addressing disallowance, limitation, bona fide belief, interest and penalty, and consulting a tax expert for drafting.