2018 (4) TMI 1162

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....They purchased various steel items such as angles, channels, sheets, plates, etc. for fabrication and erection of various capital goods, like boiler supporting structure, platform, stairs, grating etc. and availed Cenvat credit in respect of such iron and steel items. As the structures were intended to provide support to various capital goods installed in the factory, the department was of the view that the assessee was not entitled to avail such cenvat credit and after issue of show cause notice, proceeded to deny the cenvat credit totally amounting to Rs. 2,71,76,896/-. In the original proceedings before the adjudicating authority, the entire cenvat credit availed as above, was denied. When the appeal was filed before the Tribunal, same w....

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.... and cenvat credit on said item is allowable. He specifically relied on the decision of Mundra Ports and Special Economic Zone Ltd. [ 2015-TIOL-1288-HC-AHM-ST] and CCE, Raipur vs. Monnet Ispat & Energy Ltd. [ 2016-TIOL-1934-CESTAT-DEL]. 5. Learned advocate further submitted that the balance amount of Rs. 32 lakh has been denied by the adjudicating authority on the ground that the assessee has consumed iron and steel structures to an extent more than what has been specified in their " bill of material" prepared at the time of planning of installation of capital goods. In few cases, he submitted that the cenvat credit has also been disallowed which has been taken by the assessee in the first place. Finally, he submitted that the entire amo....

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.... decisions. The Tribunal in the case of Singhal Enterprises Pvt. Ltd. vs. CCE [2016 (341) ELT 372 (Tri-Del)] has observed that :- "(14. The Larger Bench decision in Vandana Global Ltd."s case (supra) laid down that even if the iron and articles were used as supporting structures, they would not be eligible for the credit. Considering the amendment made w.e.f. 7-7-2009 as a clarification amendment and hence to be considered retrospectively. However, we find that the said decision of the Larger Bench was considered by the Hon"ble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd., 2015 (04) LCX0197 = 2015 (39) S.T.R. 726 (Guj.), wherein it was observed that the amendment made on 7-7-2009 cannot be held to be ....

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....udes, components, spares and accessories of such capital goods. Accordingly, applying the "User Test" to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of „Capital Goods" as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat credit." 10. By following the above decision, we find that the cenvat credit amounting to Rs. 20 lakh will be allowable to the assessee. 11. The Cenvat credit amounting to Rs. 32 lakh has been denied by the adjudicating authority. He has proceeded by comparing the quantity of material consumed in the fabrication of supporting structure with the bill of material o....