CESTAT, MUMBAI BENCH
LSR Speciality Oils (P.) Ltd.
Versus
Commissioner of Central Excise
Order No.A/124/2013/SMB/C-IV
APPEAL NO. E/879/2012-Mum
JANUARY 8, 2013
ORDER
1. The appellant is in appeal against the impugned order wherein CENVAT credit has been denied on MS angle and HR sheet on the premise that the same does not cover under Chapter 72 of Central Excise Tariff Act, 1985.
2. The learned Counsel appearing for the appellant contended that MS angle and HR sheet were used by them for fabrication of storage tank. Hence they are entitled for CENVAT credit in terms of Explanation 2 to the definition of ‘inputs’ in Rule 2(k) of CENVAT Credit Rules, 2004. Therefore, the impugned order be set aside and the appeal be allowed.
3. On the other hand, the learned A.R. appearing for the Revenue strongly opposes the contention of the learned Counsel and submits that these MS angle and HR sheets are being used by the appellant for a structure which is embedded to the earth. In view of the Tribunal’s Larger Bench decision in Vandana Global Ltd. v. CCE [2010] 26 STT 379 (New Delhi – Cestat)(LB) CENVAT credit in question will not be admissible to the applicant.
4. Heard both sides and considered the submissions.
5. In case the only dispute is that whether the MS angle and HR sheet used for fabrication of storage tank are entitled for CENVAT credit or not. As per Rule 2(a) of the CENVAT Credit Rules,2004 capital goods have been defined as reproduced below:-
Rule 2(a)-“Capital goods” means
(A) the following goods, namely:-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, 1 [heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804] 1 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof;
(vii) storage tank used-
(1) in the factory of the manufacturer of the final products, but does not include any equipment
Or
(2) for providing output service;
6. As per explanation to Rule 2(k) of the CENVAT Credit Rules, 2004, storage tanks have been specified as capital goods and, therefore, inputs which are used in the manufacture of capital goods are also eligible for CENVAT credit. It is not in dispute that the steel items such as M.S. angles, H.R. sheets have not been used in the construction of storage tank which is a capital goods therefore, CENVAT credit on these M.S. angle and H.R. Sheet cannot be denied.
7. With these observations, I set aside the impugned order and allow the appeal with consequential relief, if any.
