Order date – 16 September 2022

Facts – 

• The Appellant, M/s. Steel Strips Wheels Ltd., is engaged in manufacture of automotive wheel rims and are registered with the Central Excise Department. 
• They availed the facility of CENVAT credit of duty paid on inputs, capital goods and service tax for paying central excise duty on clearance of the final products. 
• It was noticed that the appellant has availed CENVAT credit on MS sheets, SS sheets and zinc sheets which were used for fabrication of a new paint plant in their premises. 
• The department was of the opinion that the credit availed on such items under the category of capital goods is not eligible.
• Show Cause Notice was issued for the period 28.1.2008 to 30.7.2008 proposing to disallow the credit availed on these items as capital goods and also to recover the same along with interest and to impose penalty, which was confirmed by the authorities.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the credit availed on structural items in the nature of MS sheets, angles etc. are eligible for credit?

 Order – 

• The Tribunal observed that there is no dispute that the MS items were used for fabricating and installing paint plant within the premises of the appellant. The said paint plant is also integral to the manufacturing activity. 
• Also relying on Vandana Global Ltd. Vs. CCE, Raipur in which it was held that the amendment brought forth in the definition of capital goods with effect from 7.7.2009 has retrospective effect.
• Therefore the tribunal held that the credit availed on MS items has to be allowed to the appellant. 
• Appeal allowed.