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2022 (11) TMI 1143 - CESTAT KOLKATAIrregular utilization of CENVAT Credit - inputs used in manufacture of capital goods - Joist - MS Channel - MS Joist - TMT Bars - Plate - RS Joist - MS Angles - nexus/pertinence in or in relation to manufacture of the excisable goods - applicability of N/N. 61/2009-CE (NT) dated 07.07.2009 - period March 2008, July 2008 and January 2009 - HELD THAT:- Clause (i) of Rule 2(a)(A) is parimateria with clause (3) of the table annexed to Rule 57Q. Similarly, clause (iii) of Rule 2(a)(A) is parimateria with clause (5) of the table annexed to Rule 57Q. In the case of Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT], the Hon’ble Supreme Court considered the question whether the steel plates and channels used in the fabrication of chimney for DG set would fall within the purview of Sl. No. 5 of the table annexed to Rule 57Q. The Hon’ble Supreme Court observed that the DG set fell under Heading No. 85.02, Chapter 85, of First Schedule to the Central Excise Tariff Act and ipso facto got covered under Sl. No. 3 of the table ibid. The Hon’ble Supreme Court further noted that the chimney attached to the DG set was undisputedly covered by Sl. No. 5 of the table ibid. On this basis, it was held that the chimney was an integral part of the DG set and, therefore, MS channels, plates, etc., used in its fabrication were to be treated as accessories in terms of Sl. No. 5 of the table ibid. This judgement was rendered by applying the “user test”. The facts of the present case are perfectly analogous to those of Rajasthan Spinning & Weaving Mills Ltd. It is not in dispute that MS angles, plates, etc., were used to fabricate structural support for machinery which was used for manufacturing excisable goods. It is, again, not in dispute that the machinery is squarely covered by clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. The immediate question is whether the structural support for the machinery could be treated as ‘capital goods’. Indeed, it should be construed to be an integral part of the machinery and hence to be covered by clause (i) ibid. If that be so, as held by the Hon’ble Supreme Court in the aforesaid case, the plates, angles, etc., used for fabricating structural support will fall within the purview of clause (iii) of Rule 2(a)(A). Therefore, it has to be held that the MS angles, plates and rounds used by the Respondent for fabricating structural support for machinery would qualify to be ‘capital goods’ for the purpose of availing CENVAT credit. The view of the Tribunal’s Larger Bench in the case of Vandana Global Ltd. [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)], taken much before the Hon’ble Supreme Court rendered the judgement in the case of Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT], was to the effect that the supporting structure for a machinery could not be considered to be part or accessories of the machinery and, therefore, the steel items used for constructing such supporting structure would not be ‘capital goods’ for the purpose of CENVAT credit. This view of the Larger Bench is no longer valid as it runs contrary to the subsequent ruling of the Apex Court. The Appeal filed by the Appellant is allowed.
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