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2014 (10) TMI 763 - HC - Central ExciseDenial of CENVAT Credit - Capital goods - Credit taken on MS tanks - Held that:- By no stretch of imagination one can deny that MS Tank used in the manufacturing process is not a plant, machinery, apparatus, equipment etc. items in question were used in the erection of various machineries such as, - new additional Electrostatic Precipitator for raw mill project, additional fly ash handling system, MMD crusher etc., for the Dry Process Cement Manufacturing Plant. It is evident that MS Angles, MS Beams,MS Channels etc., were used in the erection of machineries it become component of the same, which are integral part of Dry Process Cement Manufacturing Plant. It is noted that Fly Ash handlish system is a pollution control equipment and particularly mentioned in 2(A)(A)(ii) of Rules, 2004. The allegation in the above show-cause notice that the Chapter Heading of these items were not covered under Rule 2(a) of the Rules, 2004, is not sustainable, in respect of Pollution control equipments because the rule does not specify the tariff headings under which pollution control equipment should be falling. The appellant established that these items were used for erection of capital goods namely Dry Process Cement Manufacturing Plant, which falls under Chapter 84, as mentioned in Serial No.(i) of Rules 2(a)(A). Thus, the items in question are covered in serial No.(iii) of Rules 2(a)(A) of the Rules, CBEC has clarified that all parts, components, accessories which are to be used with capital goods in serial (i) and (ii) of Rules 2(a)(A) and classifiable under any chapter heading are eligible for availment of CENVAT credit. A plain reading of serial (iii) cannot lead to a different conclusion either. The keyword is that such goods must be used in the factory for the manufacture of the final products and it is relatable to plant, equipment, machinery set out in Explanation (1)(a) to Sec.57Q and which is used for producing or processing any goods or bringing about any change in any substance for the manufacture of final product. The intent is wide enough to accept MS Tank as capital goods. Following decision of The Commissioner of Central Excise & Service Tax Versus M/s. India Cements Ltd. [2014 (7) TMI 881 - MADRAS HIGH COURT] - Decided against Revenue.
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