Order date – 01 November 2022

 Facts –

• The Appellant, M/s.Vishal Metallics Private Limited, is engaged in the manufacture of Sponge Iron. For setting up of their Sponge Iron Plant they purchased 145.035 MT of Iron and Steel Materials like H.R. Plates, M.S. Plate, Flats, Beams, Channel, Chequered Coil, Angel etc. during April 2008 to March 2009 and claimed CENVAT Credit of Rs.5,51,616/-
• Show Cause Notice dated 25.07.2012 was issued inter alia alleging that the Appellant had availed irregular and inadmissible CENVAT Credit of Rs.5,51,616/- during the period April,2008 to March,2009 on the Iron and Steel materials which are purportedly utilized for manufacture of ‘supporting structures’.
• Aggrieve appellant had filed an appeal

Issue – 

• Whether Cenvat credit is eligible on Iron and Steel materials utilized for manufacture of Sponge Iron? 

Order – 

• The Tribunal relied on the case of CCE Vs. Jindal Steels &  Power Ltd., reported in 2015 (330) ELT 708 (Tri.-Del.) which held that Crane Girder, Crane Rail, Crane Column, Crane Surg Girder, Base Frame of various production machineries as ‘accessories’ and allowed CENVAT Credit on the Iron & Steel Materials used in the manufacture thereof. 
• In the instant case the Tribunal further found that the dispute relates to the period from April, 2008 to March, 2009 whereas the Show Cause Notice is issued on dated 25.07.2012 i.e. beyond normal period of limitation of one year. Therefore, as per Section 11A of the Central Excise Act, 1944 the entire demand is barred by normal period of limitation. 
• The Tribunal observed that the principle of “user test” also need to be considered while deciding the entitlement of assessee to avail CENVAT Credit as laid down by the Hon’ble Supreme Court in the case of CCE Vs. Rajasthan that iron and steel items and cement used for erection of foundation and support structures would also come within the ambit of the definition of “input” so long as it satisfies the “user test”
• Thus, it is held that various steel items have been used for the purpose of setting up of Sponge Iron Plant for manufacture of final products. Therefore, by applying the “user test” principle, the Appellant is entitled to avail credit on the steel items. 
• Hence the appeal was allowed.