Credit of MS Channels and beams available only if used as structural part for fabrication of capital goods.

PJ/Case Law/2013-14/1846

Case:-RAVASCO TRANSMISSION & PACKING PVT. LTD. VERSUS COMMR. OF C. EX., VAPI

Citation:- 2013 (292) E.L.T. 441 (Tri.-Ahmd.)

Brief fact:-Ld. Commissioner (Appeals) has denied the Cenvat credit of Rs. 64,552 availed by the appellant and demanded the same with interest and penalty has been imposed on the ground that the M.S. Channels and M.S. Beams on which the credit was taken by the appellant are neither the capital goods nor the components, spares accessories of capital goods as defined under Rule 2(b) of Cenvat Credit Rules, 2004.

Appellant’s Contention:-The appellant submitted that he had fabricated the plants and machinery called Press Line Machine within their factory. For fabrication of the machinery, number of components, spares and accessories were required and the appellant procured M.S. Channels and Beam and used the same for fabrication of Press Line Machine. He drew attention to the 3 photographs submitted wherein, it has been shown as to how the M.S. Beams and Channels have been used by the appellant in the factory. He also relies upon the circular issued by the Board on 2-4-2012 to submit that the M.S. Channels and the beams have been used by them as structural part and not for foundation or for structural support to the machinery.

Respondent’s Contention:-The Respondent submits that the Commissioner (Appeals) in his impugned order had clearly held that the M.S. beams and channels had been used for supporting the machinery and therefore the appellant is not eligible for Cenvat Credit.

Reasoning of Judgment:- Having considered the submissions and records made by both the side, on seeing the photographs submitted by the appellant, Tribunal finds that the beams have been used to keep the electric motor in the elevated position and the motor is connected to the roller to facilitate the movement of the finished goods manufactured by the appellant. If the motor is required to be put in the elevated position for requirement of machinery, it cannot be said as a supporting structure, but treated as a structural part. As regards the M.S. channels, the ld. Consultant submitted that the same were used as rollers to move the finished goods, would show that they have not been used as supporting structure. So after analyzing the matter and submissions and photographs, Tribunal finds that the appellant is eligible for the credit availed by them. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief to the appellant.

Decision:-Appeal Allowed.

Comment:-The essence of this case is that the Cenvat Credit with respect to MS Channels and beams is only allowable when they are used as the structural parts for the manufacturing of the Capital goods. Credit would be not allowable in case they are used for supporting structural parts of capital goods.

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PJ/Case Law/2013-14/1846

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