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2022 (5) TMI 475 - CESTAT AHMEDABADCENVAT Credit - goods used for civil construction purpose or repairs - inputs/Capital Goods or not - M.S Beams - M.S. Pipes - Plates - Channels - Sheets - Flats - Chain - Anodes - Tube - Conveyor Belts - Filter Bags - S.S. Structures - Tyres - Rope - Welding Electrodes etc. - period June 2007 to December 2007 - HELD THAT:- The department have erred in relying upon the amended Explanation-II with effect from the year 2009, whereas admittedly the credits in question were taken during period June 2007 to Dec. 2007. We further find that the ruling in the case of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)], have been overruled by Hon’ble Gujarat High Court in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS [2015 (5) TMI 663 - GUJARAT HIGH COURT] and by Hon’ble Madras High Court in the case of M/S. INDIA CEMENTS LTD. VERSUS THE CUSTOM, EXCISE AND SERVICE TAX & THE COMMISSIONER OF CENTRAL EXCISE, [2015 (3) TMI 661 - MADRAS HIGH COURT], wherein it is categorically held that steel items and supporting structures are essential part of the machinery, so as to run the same for manufacture of dutiable finished products. Accordingly, the Hon’ble High Court held that the steels items used in the plant and machinery and supporting structures are eligible for Cenvat credit. In the present matter use of the impugned goods were not disputed by the department, further revenue also not disputed the Joint verification report duly signed by the Deputy Commissioner, Central Excise, Gandhidham and representative of assessee. The said verification report has categorically described the usage of the materials under dispute on which cenvat credit has been availed by the assessee. The issue of utilization of goods for repairs and maintenance of capital goods is no longer res integra and the same have been decided in favour of the assessee by number of decisions. If any items is used for repair and maintenance of the plant and machinery, the same would be eligible for Cenvat credit. Whether the disputed items in question are also used for repairs/maintenance of capital goods by way of replacement of old/worn out parts/components of such capital goods? - HELD THAT:- This factual position is to be seen through the verification reports. However, the revenue has proceeded on the premise that the disputed items were used for fabricating/manufacturing of capital goods. If this finding is presumed to be correct for a moment, then there is a prima facie case for holding that the disputed items were used in the manufacture of capital goods and, hence, by virtue of the aforesaid Explanation to the definition given under Rule 2(k), disputed items could be considered as “inputs” - the credit is admissible on the disputed goods in question. Denial of credit on Aluminium Zinc anodes which was used in laboratory of the factory - HELD THAT:- The said laboratory is functioning in the factory of the appellant for quality checks of raw materials and finished goods. The impugned goods were used in laboratory of appellant, which ultimately used for manufactured goods and satisfy the definition of input, hence the Cenvat credit should not be denied to the assessee. Denial of CENVAT Credit availed on goods which were used in the erection of transmission towers installed from the power plant to the factory for bringing in the electricity - HELD THAT:- The Ld. Commissioner observed that the primary condition in respect of the goods which may qualify the definition of either ‘inputs or ‘capital goods’ under Cenvat Credit Rules, 2004 is that they have to be used within the factory of manufacture. This criteria has not been satisfied in this matter - In the present matter impugned goods were used in the erection of transmission towers installed from the power plant to the factory of appellant for bringing the electricity, the said electricity undisputedly used in the factory premises of the Appellant for manufacturing their final product which has been cleared on payment of duty - the appellant has correctly availed the credit on disputed goods. Denial of credit availed on furniture - HELD THAT:- There is no dispute that the said furnitures are used in guest house and the guest house is part of factory. In Board’s Circular No. 943/4/2011-CX, dated 29-4-2011, it is mentioned that “goods such as furniture and stationery used in an office within the factory are goods used in the factory and are used in relation to the manufacturing, business and hence, the credit on the same is to be allowed” - Undisputedly, the guesthouse is used for operations of the factory. Nothing is available on record to show that guesthouse is used for any other purpose. In view of this fact, since guesthouse used for operations of factory which has direct nexus with factory which produces excisable goods therefore Cenvat credit is admissible to the appellant on the furnitures used in Guest House of the factory. The Revenue’s appeal being devoid of merit is dismissed - Decided against Revenue.
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