Materials for making Foundation of Machineries in factory premises are Capital Goods under Rule 2(a) of CCR, eligible for Cenvat Credit: CESTAT [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that Materials for making foundation of machineries in factory premises are capital goods under Rule 2(a) of Cenvat Credit Rules, 2004 (CCR) are eligible for cenvat credit.

The issue involved in the present case is that whether the appellant, Hng Float Glass Ltd is entitled for cenvat credit in respect of Cement, TMT bars, MS angles, channels, beams, racks, plates, etc. used for making foundation of machineries installed in the factory premises and for making structure for support of the plant and machinery qualified as capital goods as defined in Rule 2(a) of Cenvat Credit Rules, 2004 for the period April 2008 to April, 2010.

T.V. Venkateswaran and Nikita Jain, Chartered Accountant appearing for the appellant submitted that the adjudicating authority has denied the credit on the goods in question mainly on the ground that the definition of input has been amended vide Notification No.16/2009-CE (N.T.) whereby, the goods in question have been excluded from the purview of definition of inputs and the same was retrospective in the light of the decision in the case of Vandana Global Ltd.

The Counsel further submitted that all the goods were used for the manufacture of capital goods within the factory therefore, either for manufacturing of capital goods or used as parts and accessories of capital goods i.e. machinery therefore, the credit is admissible. The judgment of Vandana Global has been reversed by the Chhattisgarh High Court wherein, it was categorically held that the amendment of notification no.16/2009-CE (N.T.) cannot be applied retrospectively.

A Coram consisting Of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The capital goods were parts and components used as support structure for plant and machinery erected and installed in the factory of the appellant. On this ground also the credit is admissible to the appellant accordingly, we are of the considered view that appellant is entitled for cenvat.”

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.