Order date – 24 November 2022

Facts –

• The Appellant, Vriddheshwar SSK Ltd, are manufacturers of sugar and molasses and are availing the benefit of Cenvat credit on inputs, capital goods and input services under the provisions of Cenvat Credit Rules, 2004.
• During audit, it has been noticed that they had availed Cenvat credit of central excise duty amounting to Rs.2,68,091/- paid on items such as which are not inputs for manufacture of sugar and molasses and Cenvat credit is not admissible. 
• On being pointed out by the audit, the appellant reversed the amount vide Cenvat account Debit entry. But as the appellant had already availed inadmissible Cenvat credit, a show-cause notice was issued.

Issue –

• Whether the appellant is justified in availing the Cenvat credit on various which, according to them, have been used in those machines which are manufacturing the final product?

Order –

• The Tribunal observed that the basis of denial of credit is that these are not the capital goods and the appellant had failed to produce any evidence in support of their submission. The only case made out by the department is that the items in issue are not covered by the definition of capital goods in terms of Rule 2(a) ibid and are generally used for structures providing support to the capital goods which are excluded from the definition of capital goods.
• The Tribunal relied on the decision of the Chennai Bench Tribunal in the matter of Kallakurichi cooperative Sugar Mills Ltd. vs. CCE, Puducherry Commissionerate; 2020 SCC Online CESTAT 2529 held Welding rods, steel pipes, HR sheets, SS welding tubes, MS angles, channels as capital goods and allowed the Cenvat credit availed by the appellant therein. 
• The parts in issue herein have been used for smooth and efficient functioning of the machinery which has been used for manufacturing Sugar and Molasses and therefore there is no reason not to allow the credit in issue to the Appellants.
• Hence it is held that that the appellants are entitled for Cenvat credit of the items in issue herein and accordingly the appeal filed by the appellant is allowed.