2017 (8) TMI 259

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...., TMT Bars, CTD Bars H. R. Sheets used for fabrication of machinery and also Repairing and Maintenance Service. Alleging that these items are not eligible to credit, SCN was issued to them for recovery of credit of Rs. 2,28,959/- for the period from June 2008 to August 2009. On adjudication, the demand was confirmed alongwith interest and equal amount of penalty. Aggrieved by the said order, the Ld. Commissioner (Appeals), who inturn, rejected their appeal. Hence, the present appeal. 3. The Ld. Advocate Shri Rahul Gajera for the appellant submits that all these items were used for fabrication of capital goods and also for repair and maintenance of machines installed in the factory, hence, eligible to credit as per the definition of 'input'....

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....he judgement of Principal Bench At Delhi in Singhal Enterprises Ltd's case (supra) 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 ha....

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....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 defin....