Mild Steel Items used for manufacturing of Capital goods within factory premises are eligible for CENVAT Credit of Excise Duty: CESTAT [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that all the mild steel (MS) items for manufacturing of capital goods within the factory premises are eligible for CENVAT Credit. 

Amit Metaliks Limited, the appellant assessee are manufacturers of MS Ingots, MS Billets, and other Re-rolled MS products falling under Chapter 72 of CETA, 1985 and they had taken CENVAT Credit on various inputs, Capital goods, and consumables for the manufacture of their end products as well as for the manufacture of captively consumed capital goods like Furnace, Accessories, Cooling Bed, Conveyor System, Mill Accessories, EOT Crane Operating System, Pollution Control System, and Electrical Installation System, etc. 

The assessee appealed against the order passed by the adjudicating authority for confirming the CENVAT Credit demand taken on Capital goods and inputs used for Capital goods-96,39,797/-. 

Sourabh Bagaria and Indranil Banerjee, the counsels for the assessee contended that the Certificate issued by the Chartered Engineer where the number of Angles, Channels, Beam, Plates, H. R. Coil, etc. used for various capital equipment like Furnace and accessories, Crane Operating System, Cooling Tower, etc. have been elaborately given. 

Also submitted that all the items in question have been used in the manufacture of various capital goods within the factory premises and all the capital goods emerging thus are essential for the manufacture of the finished goods by the assessee. 

P. K. Ghosh, the counsel for the department contended that the assessee was not eligible to take the CENVAT Credit for various capital goods and inputs. 

The Bench observed that in the case of Vandana Global Ltd. Vs. CCE, the court held that all the MS items for manufacturing capital goods within the factory premises are eligible for CENVAT Credit of Excise Duty. 

The two-member bench comprising Muralidhar (Judicial) and K Anpazhakan (Technical) held that the capital goods that are embedded are required for the manufacture of the finished goods, and CENVAT Credit cannot be denied. 

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