Cenvat Credit allowable on Steel Items setting up of Sponge Iron Kiln along with Power Plant: CESTAT applies 'User Test' [Read Order]
![Cenvat Credit allowable on Steel Items setting up of Sponge Iron Kiln along with Power Plant: CESTAT applies User Test [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/05/Cenvat-Credit-Steel-Items-Sponge-Iron-Kiln-Power-Plant-CESTAT-User-Test-Taxscan.jpg "Cenvat Credit allowable on Steel Items setting up of Sponge Iron Kiln along with Power Plant: CESTAT applies User Test [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has applied the “user-test” by allowing cenvat credit allowable on steel items setting up of sponge iron kiln along with power plant. The assessee, M/s. Aryan Ispat and Power Pvt. Ltd. is engaged in the manufacture of iron and steel items on which applicable Central Excise Duty is being paid. The assessee...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has applied the “user-test” by allowing cenvat credit allowable on steel items setting up of sponge iron kiln along with power plant.
The assessee, M/s. Aryan Ispat and Power Pvt. Ltd. is engaged in the manufacture of iron and steel items on which applicable Central Excise Duty is being paid. The assessee had undertaken the work of erection and commissioning of 2X100 TPD and 350 TPD sponge iron kiln, 12 MW power plant and its auxiliary unit and coal crusher and coal washery at its plant for use in the manufacture of final products i.e. steel items. They have availed CENVAT Credit on various inputs and capital goods used in connection with the erection and commissioning of the said plant in terms of the provisions of CENVAT Credit Rule 2004. However, the department rejected the claim by holding that such items are not eligible for cenvat credit.
Relying on a catena of decision, the Tribunal bench comprising Shri P. K.Choudhary, Member(Judicial) and Shri P.Anjani Kumar, Member(Technical) observed that the amendment made in the Credit Rules on 07.07.2009 to restrict the credit on structural items cannot be considered to be retrospective in nature.
“In the facts of the present case, it is not in dispute that the various steel items have been used for the purpose of setting up of sponge iron kiln along with the power plant as also certified by the Chartered Engineer have been duly verified by the lower authorities in the adjudication stage. Therefore, applying the “user test” principle, as followed by the various High Courts, the assessee is entitled to avail credit on the steel items,” the Tribunal said.
Shri Kartik Kurmy, Advocate appeared for the Assessee/Respondent.
To Read the full text of the Order CLICK HERE
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