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

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.