Imported Aluminium Panels Used In Mivan Formwork Not 'Moulds' For CENVAT Credit: CESTAT Bengaluru

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 July held that aluminium panels imported for use in Mivan formwork cannot be treated as “moulds” for availing Cenvat credit merely because they are assembled into mould-like structures after import.

Judicial Member P. A. Augustian and Technical Member R. Bhagya Devi allowed the appeal filed by the Revenue against an order granting Cenvat credit to Puravankara Projects Ltd., noting that the goods must be assessed based on their identity and classification at the time of import. The Bench held:

“Admittedly, the goods were classified as aluminium panels under CTH 7610 and not as moulds under CTH 8480 because the respondent himself in his submissions admits to the fact that when the imported items are assembled at their factory, the formwork takes a form of a hollow container in the suitable shape and when the concrete is poured inside, the formwork is removed after concrete is hardened.”

During an audit, the Department found that Puravankara Projects Ltd. had imported aluminium panels classified under Customs Tariff Heading (CTH) 7610 9090 and availed Cenvat credit by treating them as capital goods under the Cenvat Credit Rules, 2004.

The Revenue contended that the imported goods were neither moulds nor capital goods eligible for credit under the Rules. It argued that the goods were only aluminium panels used in construction activity and that the Commissioner had wrongly relied on the functionality of the goods instead of their classification at the time of import.

Puravankara Projects Ltd. argued that the imported panels formed part of the specialised Mivan System formwork used for casting concrete structures. It submitted that the panels functioned as moulds capable of repeated use and that their functional use should determine their eligibility for Cenvat credit.

The company also argued that the demand covering the period from October 2007 to March 2008 was barred by limitation as the show cause notice was issued only on 8 October 2009 without any allegation of suppression.

The Tribunal noted that the imported goods were classified as aluminium panels under CTH 7610 and not as moulds under CTH 8480, which specifically covers moulds. It observed that the aluminium panels acquired the character of moulds only after they were assembled at Puravankara Projects Ltd.'s premises. Therefore, the imported articles themselves could not be treated as moulds for the purpose of availing Cenvat credit.

Further, the Bench held that Cenvat credit eligibility has to be determined on the basis of the goods imported and not on the basis of the resultant structure created after assembly or the manner in which the goods are ultimately used. It observed:

“Cenvat credit is on the products that are imported and not based on the resultant product at the premises of the respondent. Therefore, the Commissioner was not justified in extending the cenvat credit on the inputs which are categorically ineligible as per the Cenvat Credit Rules, 2004.”

Holding that the Commissioner had erred in granting Cenvat credit by treating the aluminium panels as moulds, the Tribunal set aside the impugned order. However, since the Commissioner had not examined Puravankara Projects Ltd.'s plea regarding limitation, it remanded the matter to the adjudicating authority only for deciding whether the demand was barred by limitation.

Accordingly, the CESTAT allowed the Revenue's appeal by way of remand, while disposing of the cross-objection filed by Puravankara Projects Ltd.

For Appellant: M. Sreekanth, Asst. Commissioner

For Respondent: Vinayaka Hegde, Chartered Accountant