2017 (8) TMI 262

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....M. S. beam, Steel Tub, P. F. Beam, ERW Pipe, Welding Electrodes etc., used for fabrication of capital goods viz. Storage Tanks, boilers, evaporator vapour lines, etc. and supporting structures of various machineries in their factory premises. Alleging that these items do not fall under the definition of capital goods, SCN was issued to them for recovery of credit of Rs. 12,35,448/- during the period from April 2007 to March 2010 by issuing a notice dated 20.03.2012. On adjudication, the demand was confirmed alongwith interest and equal amount of penalty. On appeal, the Ld. Commissioner (Appeals) upheld the order of the Adjudicating Authority. Hence, the present appeal. 3. The Ld. Advocate Shri J. C. Patel for the appellant submits that on ....

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....ved 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 further been pleaded that the Cenvat credit claimed for the period prior to this will....

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....d 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 definition of 'Capital Goods' includes, components, spares and accessories of such capital g....