The Customs, Excise& Service Tax Appellate Tribunal (CESTAT), Chennai, has on Friday ruled that CENVAT credit is to be allowed on structural items in the nature of MS sheets, angles etc.
The said ruling was made by the tribunal in an appeal filed before it by the appellant, who, being a manufacturer of automotive wheel rims registered with the Central Excise Department, had availed the facility of CENVAT credit of duty, paid on inputs, capital goods, and service tax, with regard to the payment of central excise duty on clearance of his final products.
However, the department as well as the commissioner (appeals), before whom the appellant had filed his first appeal, was of the opinion that the CENVAT credit availed by the appellant MS sheets, SS sheets, zinc sheets, etc., used for fabrication of new paint plant in his premises, falls under the category of capital goods and that the same being capital goods ineligible for CENVAT credit, and further that the department is justified in disallowing the same, recovering such credit earlier allowed along with interest, and in imposing a penalty upon the appellant.
“There is no dispute that the MS items were used for fabricating and installing the paint plant within the premises of the appellant, and that the said paint plant is also integral to the appellant’s manufacturing activity. After appreciating the facts and applying the decision in the case of India Cements Ltd., I hold that the credit availed on MS items has to be allowed to the appellant and that the impugned order disallowing the credit be set aside” – Ms. Sulekha Beevi C.S., Member (Judicial) CESTAT, observed, allowing the appellant’s appeal with consequential relief.
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