Cenvat credit availment on inputs used for assembling storage tank

[Guest]

Dear Sir,

We are a paint mfg co, pleas advise whether we can avail cenvat credit of the materials i.e. Inputs used for assembling storage tank which is used for storage of solvents, water used in the manufacturing process. Please give us any references regarding this.

[Ganeshan Kalyani]

Sir, please refer below given issue id.

#1Issue Id: - 109552
Dated: 17-12-2015

May your query be resolved. Thanks.

[KASTURI SETHI]

It is a fact that final product cannot be manufactured without storage tank which is capital goods under Rule 2 (a) of Cenvat Credit Rules, 2004. Hence in my view credit should be admissible in terms of Board's circular no.267/11/2010-CX dated 8.7.2010 (Para No.3 refers). This circular is based on the judgement of Supreme Court. Read the whole circular carefully to ensure the eligibility as situation differs from case to case.

[MUKUND THAKKAR]

I agree with view given by Sh. Kasturi Sethiji.

[MADAN RAHEJA]

Dear Sir, Please check decision in 2013 (1) TMI 731 - CESTAT MUMBAI in the case of LSR SPECIALITY OILS PVT. LTD. on similar matter.

[KASTURI SETHI]

Sh.Madan Raheja Ji,

Thanks a lot for posting judgement. As per EXCUS, this has not been challenged by the department.

[Ganeshan Kalyani]

Sir, also please refer 2010 (7) TMI 12 - SUPREME COURT OF INDIA decision in case of Commissioner Of Central Excise, Jaipur Versus M/s RajasthanSpinning & Weaving Mills Ltd.

Thanks.

AI Summary

Cenvat credit on capital goods permitted where storage tanks are essential to manufacture, subject to eligibility under circular guidance. Cenvat credit may be claimed on inputs used to assemble a storage tank for solvents and process water where the tank qualifies as a capital good under Rule 2(a) of the Cenvat Credit Rules, 2004; Board Circular No.267/11/2010-CX (para 3), based on a Supreme Court decision, and tribunal practice applying the essentiality principle, support admissibility, subject to case-specific eligibility verification.