2023 (3) TMI 1209

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.... a narrow compass, hence it is taken up for hearing with the consent of the Ld. Authorized Representative for the Department. 2. The facts of the case in brief are that the Appellant is a manufacturer of Sponge Iron. During the period from November 2006 to March 2008 they have availed CENVAT Credit on steel items such as TMT bars, Chequered Plate, M.S. Angles, Channels, Plates, Joists, Beams, HR Plate, Sheet and Coils, G.C. Sheet etc.. Three Show Cause Notices were issued alleging irregular availment of CENVAT Credit on the impugned items and also to recover the alleged irregular availment of CENVAT Credit along with interest and for imposition of penalty as under:- Sl. No. Show Cause Notice date Period Amount Rs. 1. 19....

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.....L.T. 372 (Tri.-Del.). The relevant paragraphs are reproduced:- "9. We proceed to decide the appeal on the two following issues : (i) Entitlement of Cenvat credit on welding electrodes; and (ii) Availability of Cenvat credit on various structural items, such as, MS Angles, Channels, CTD bar, TMT bar, etc. which have been used in support structure of the capital goods. 10. As regards the credit of duty on welding electrodes, the appellants have cited the following judicial pronouncements to support the contention that the said credit will be allowable : (i) 2006 (194) E.L.T. 3 (S.C.); (ii) 2002 (140) E.L.T. 372 (P&H) (iii) 2004 (173) E.L.T. 117 (Guj.). 11. On the other h....

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....dering them as "Inputs". 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 prio....

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....r 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 definition of 'Capital Goods' includes, components, spares and....

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....factory shed, building or laying of foundation or making of structures for support of capital goods." 8. Therefore, the notification of the Legislature is very clear that it is only the ''inputs'' used in the manufacture or construction of capital goods which is construed as input and cenvat credit is available on the duty paid in purchase of such inputs. If the cement, angles, channels, Centrally Twister Deform bar (C.T.D.) or Thermo Mechanically Treated bar (T.M.T.) and other items are used in the construction of factory shed, building or laying of foundation, the duty paid on such items the assessee would not be entitled to cenvat credit. Similarly, though the assessee is entitled to cenvat credit of cement and steel used in the....