Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Cenvat credits are allowable for Iron and Steel items used for maintenance of machinery.
Sh. Bipin Garg & Ms J. Kainat appeared for the appellant and Sh. Ishwar Charan appeared for the respondent.
On the first round appeal before the Tribunal the appellant was allowed to cenvat credit totalling Rs.20,23,779/- and disallowed the credit totalling Rs. 2,50,195/-, which was mainly on account of iron and steel structure, tower material, and steel casting. For the Mangrol unit of the appellant, the Tribunal allowed the cenvat credit of Rs. 9,80,449/- and disallowed credit for Rs. 3,39,873/- being amount towards iron and steel structure, tower material, aluminium conductors.
The appellant stated that these items have been used in the repair and maintenance of the existing plant and machinery and also in the fabrication of structural to support the manufacturing machinery, without which no manufacture can take place of the excisable goods.
It was observed that cenvat credit was allowable also as input, as the items have been used admittedly (indirectly) as inputs in the factory of production, for the manufacture of dutiable finished goods and the steel and cement used for laying of the foundation for the erection of capital goods should be eligible for the cenvat benefit under the present set of rules.
In the light of the precedents, Judicial Member Mr Anil Choudhary while allowing the appeal set aside the impugned order and held that the appellants were entitled to cenvat credit on the items of iron and steel etc.
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