2017 (8) TMI 258

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....sed in the supporting structure i.e. M. S. Gratings attached to vertical Enameling Oven. Alleging that these items do not fall under the definition of 'capital goods', SCN was issued to them for recovery of credit of Rs. 2,59,018/- for the period from April 2008 to March 2011 by issuing a notice dated 08.10.2012. On adjudication, the demand was confirmed alongwith interest and personal penalty also imposed under Section 26 of central Excise Rules, 2002. On appeals, the Ld. Commissioner (Appeals) upheld the order of the Adjudicating Authority and rejected their appeals. Hence, the present appeals. 3. The Ld. Advocate H. D. Dave for the appellant submits that these items were used for supporting structures of capital goods, hence, eligible t....

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....e principle of law settled on the issue by various High Courts and Supreme Court observed as follows :- "13. Now we turn to the question, whether credit is admissible on various structural steel items, such as, MS Angles, Sections, Channels, TMT Bar, etc., which have been used by the appellants in the fabrication of support structures on which various capital goods are placed? The same stands denied by the lower authority. The learned DR has sought disallowance of the same by citing the decision of the Larger Bench in the case of Vandana Global Ltd. (supra) and other judgments. Further, he has brought to our notice and emphasized the amendment carried out in Explanation-II to Rule 2(a) which defines the term "Input" w.e.f. 7-7-2009. It has....

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....3 (S.C.), which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the "user test" to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace, etc. cannot be suspended in mid-air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The ....