Any steel item used for fabrication of capital goods or inputs is entitled for CENVAT credit of Excise Duty in terms of Rule 2(l) CCR: CESTAT [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that any steel item that has been used for the fabrication of capital goods or inputs is entitled to CENVAT credit in terms of Rule 2(l)/2(k) of the CENVAT Credit Rules (CCR), 2004. 

Corporate Ispat Alloys Limited, the appellant assessee claimed that they had availed CENVAT credit on iron and steel products that were used in the manufacture of capital goods in their factory for the manufacture of final products, on which they paid Central Excise duty. 

The assessee appealed against the order passed by the Commissioner of Central Excise, Bolpur for confirming the demand of duty of Rs.89,42,645/- along with interest and imposed an equal amount of duty as a penalty. 

During the hearing of this appeal, none appeared on behalf of the assessee and P. K. Ghosh appeared on behalf of the department. 

In the written submission of the assessee, the assessee stated that the iron and steel products were used for furnace equipment and furnace structure, raw material handling system, and pollution control equipment and had availed CENVAT credit on the Angles, Channels, Beams, Joists, Sheets, Plate, Coils etc, as ‘inputs’ as the same were used in the manufacture of capital goods. 

The counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not entitled to get the CENVAT credit. 

The Bench observed that in the case of Vandana Global Ltd. Vs. CCE, the court held that angles, Channels, Beams, Joists, Sheets, Plate, Coils, etc used for furnace equipment and furnace structure, raw material handling systems, pollution control equipment, are eligible for credit as ‘inputs, used in the manufacture of capital goods. 

The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the assessee was eligible for the CENVAT credit in terms of CCR and the demand itself was not sustainable. 

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