Case Law Details
Jai Balaji Industries Limited (Unit IV) Vs Commissioner of Central Excise, Customs & Service Tax (CESTAT Kolkata)
When we apply the user test to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace etc, cannot be suspended in mid air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structural, will have to be considered as parts of the relevant machines. The definition of Capital Gods includes, components, spares and accessories of such capital goods. Accordingly, applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The present appeal is directed against the Order-in-Original 108-110/COMMR/DGP/2015-16 dated 10-03-2016 passed by the Ld. Commissioner of Central Excise, Customs, Service Tax, Durgapur. The period of dispute is April 2009 to Sept. 2010.
2. That the Appellant is engaged in the manufacture of iron and steel products of different grades classifiable under Chapter 72 & 73 of the first schedule to the Central Excise Tariff Act, 1985. They had availed Cenvat credit on Angles, Channels, Joists, Beams, TMT Bars, Plate, H.R. Coils, H.R. Sheets, Rounds, Sheets. Billets, Flats, Paints, Rails, Castings, Coils, Electrode/Welding Electrode and Miscellaneous Chemical Products falling under different headings. Three periodical show cause notices were issued by the department. In all the three show cause notices the allegations against the Appellant was that the impugned goods were not defined under Rule 2(a) of the Cenvat Credit Rules, 2004. It was alleged that the said items were not defined as capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004. Accordingly, it was alleged that the credit availed and utilized by the Appellant was irregular.
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