Cenvat Credit on MS Angles, Channels etc when used for replacement & repair of Plant & Machinery

PJ/Case Laws/2012-13/1003

Case: BIRLA CORPORATION LIMITED V/S COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II

Citation: 2012 (276) E.L.T.376 (Tri – Del.)

Issue:- Whether cenvat credit is available on M.S. plates, beam, angles, etc. being used for replacement and repairs of plant and machinery?

Brief Facts: - Appellant are manufacturers of cement chargeable to Central Excise Duty. They avail cenvat credit of central excise duty paid on inputs and capital goods used in or in relation to the manufacture of their final product. The original Adjudicating Authority had disallowed the cenvat credit in respect of the above items and on appeals being filed against those orders, the Commissioner vide impugned order-in-appeal dated 9-11-2005 upheld the original Adjudicating Authority’s orders.

Hence, appellant is before the Tribunal.

Appellant’s Contention:- The appellant pleaded that the Chapter-72 items like M.S. Angles, channels, plates, beams, joists etc used for repair and maintenance of the plant and machinery are eligible for cenvat credit, that in this regard they rely upon the judgments of:

(a) UNIONOF INDIA V/S HINDUSTAN ZINC LTD.

(b) AMBUJA CEMENTS EASTERN LTD.

Respondent’s Contention:- Revenue contended that M.S. angles, channels, beams, joists etc. are neither covered by the definition of capital goods nor the same are covered by the definition of input and are not eligible for cenvat credit. In this regard they rely upon the judgment of the Larger Bench of the tribunal in the case of VANDANA GLOBAL LTD. V/S C.C.E ,RAIPUR.

Reasoning of Judgment: -The Tribunal upheld the part of the order of the Commissioner (Appeal) denying the cenvat credit on MS Angles, Channels, Plates etc used for fabrication of supporting structure. However, denial of credit on MS Angles, Channels, Plates etc used for re[air and maintenance is set aside. The Tribunal remanded the matter to the Commissioner for re-quantification of the cenvat credit demand and re-determine of the quantum of penalty to be imposed on the appellant which would be in proportion to the quantum of cenvat credit demand upheld.

Decision: - Appeal disposed of.

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PJ/Case Laws/2012-13/1003

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