Relief to Ultratech Cements: CESTAT Directs Re-Adjudication Against Denial of CENVAT Credit of Excise Duty Availed on Iron and Steel Items Falls under category of ‘Capital Goods’ [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication against the denial of CENVAT Credit of excise duty availed on the iron and steel item used for the fabrication of machinery which falls under the category of capital goods. 

Ultratech Cements Ltd, the appellant assessee appealed against the order passed by the Commissioner for denying the CENVAT credit availed by the assessee. 

Ishan Bhatt, the counsel for the assessee contended that the Iron, Steel items had been used in the fabrication of plant and machinery in the factory, the same was supported by Chartered Engineer’s Certificate. 

Further submitted that the CENVAT credit was eligible on iron, and steel items used in the fabrication of plant and machinery in the factory irrespective of the plant and machinery were embedded to earth. 

Also stated that the iron and steel items under dispute satisfied the definition of inputs in as much as they have been used in the manufacture of capital goods, which are further used in the factory of the manufacturer, as provided in Explanation 2 to Rule 2(k) of the CENVAT Credit Rules, 2004. 

Tara Prakash, the counsel for the department relied on the decisions made by the lower authorities and contended that the denial of CENVAT credit was as per the law and liable to be sustained. 

The Bench observed that the goods were used in the fabrication of machinery but the same was denied on the ground that these machinery are embedded in the earth and the assessee was eligible to get the benefit of CENVAT credit. 

The two-member bench comprising Ramesh Nair(Judicial) and C.L Mahar (Technical) remanded back the matter to Adjudicating Authority for passing a fresh order after compliance with the principles of natural justice while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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