TMI Blog2016 (12) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... ts demolished - Cenvat credit is admissible on structural steel in light of the above referred judgments - the limitation aspect ignored. Credit allowed - appeal allowed - decided in favor of assessee. - E/1097/11 - A/88346/16/SMB - Dated:- 4-7-2016 - Mr Ramesh Nair, Member(Judicial) Shri. Neerav R. Mainkar, Advocate for the Appellants Shri. R.K. Maji, Asstt. Commissioner(A.R.) for the Respondent ORDER This appeal is directed against Order-in- Appeal No. SB/139/Th I/2011 dated 5/4/2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-I, whereby Ld. Commissioner(Appeals) upholding the Order-in-Original No. 05/10-11 dated 30/7/2010 rejected the appeal of the appellant. 2. The fact of the case is that appellant are engaged in the manufacture of goods falling under Chapter 72 of the Central Excise Tariff Act, 1985 and they are availing Cenvat Credit on inputs, Capital Goods under Cenvat Credit Rules, 2004. During course of EA -2000 audit it appeared that the appellant had taken credit for the period October, 2005 to November, 2008 of ₹ 4,68,011/- on M.S. Plates, M.S. Channels, M.S. Beams, Joists, and H.R. Coils as capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law. Therefore in such nature of cases extended period of demand cannot be invoked. He placed reliance on the following judgments: (a) Commissioner of Central Excise Vs. M/s. Reliance Industries Ltd[2015-TIOL-363-HC-MUM-CX] (b) Reliance Industries Ltd. Vs. Commissioner of Central Excise, Mumbai[2013-TIOL-1057-CESTAT-MUM] (c) Union of India Vs. Bharat Aluminium Co. Ltd. [2012 (26) S.T.R. 101(Chhttisgarh)] (d) Jaiprakash Industries Ltd. Vs. Commissioner of C. Ex. Chandigarh[2002(146) ELT 481 (S.C.)] (e) Mentha Allied Products Ltd Vs. Commissioner of C. Ex. Meerut[2004(167) ELT 494(S.C.)] He submits that in view of the above decisions of Hon ble Supreme Court and High Courts demand is clearly time bar. 4. On the other hand, Shri. N.N. Prabhudesai, Ld. Superintendent (A.R.) appearing on behalf of the Revenue submits that as per the Larger Bench decision in case of Vandana Global Ltd, issue has been settled that the Cenvat credit is not admissible on the structural steel. He further submits that as regard the admissibility of the Cenvat credit on the structural steel he places reliance on the following judgments: (a) Bhart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for fabrication of structurals to support various machines like crusher, kiln, hoopers, etc., and that without these structurals, the machinery could not be erected and would not function. 10 . In the case of Commissioner of Central Excise, Jaipur v. Rajasthan Spinning Weaving Mills Ltd., reported in 2010 (255) E.L.T. 481, relied on by the learned counsel appearing for the assessee, the Apex Court, while dealing with the issue in question, in Paragraph Nos. 7 and 8, held as follows : 7. In the present case, it is seen that the 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 Rule 2(a)(A)(ii) of Rules, 2004. The allegation in the above show cause notice that the Chapter Headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding counsel appearing for the Revenue submitted that the judgment in the assessee s own case reported in AIT-2011-358-HC (The Commissioner of Central Excise v. M/s. India Cements Limited) had been appealed against, as of today, there are no details; in any event, the fact herein is that the Revenue does not controvert the facts found by the Assistant Commissioner that the impugned goods were used for fabrication of structurals to support various machines like crusher, kiln, hoppers, pre-heaters conveyor system etc. and that without these structurals, the machinery could not be erected and would not function. 9. In the decision reported in AIT-2011-358-HC (The Commissioner of Central Excise v. M/s. India Cements Limited), pointing out to Rule 57Q and the interpretation placed by the Apex Court in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning Weaving Mills Ltd.) and in particular Paragraph Nos. 12 and 13, wherein the Apex Court had applied the user test by following the Jawahar Mills s case, this Court held that steel plates and M.S. Channels used in the fabrication of chimney would fall within the ambit of capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied principles laid down in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning Weaving Mills Ltd.) and held that the Tribunal was justified in allowing the assessee s contention in respect of the very same assessee. 13 .The present appeal is also in respect of the very same assessee and therefore we find no distinguishable fact or issue contrary to the earlier decision of this Court. 14 . It is relevant to note that this Court in the decision reported in 2014-TIOL-1185-H-Mad-CX = 2014 (310) E.L.T. 636 (Mad.) in respect of the very same assessee in C.M.A. No. 1265 of 2014, following the abovesaid decision of this Court, dismissed the appeal filed by the Revenue. 15. Accordingly, following the principles laid down in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning Weaving Mills Ltd.) and the earlier decisions of this Court in C.M.A. No. 3101 of 2005, dated 13-12-2012 and C.M.A. No. 1265 of 2014, dated 10-7-2014, we are inclined to allow the appeal, thereby set aside the order of the Tribunal. Accordingly, this civil miscellaneous appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Jaipur v. Rajasthan Spinning and Weavinig Mills Ltd.) and the goods used by the assessee are falling under the capital goods, eligible for credit. 13 . For the reasons stated above, the appeal fails and the questions of law is answered in favour of assessee and the appeal is dismissed. No costs. (c) The Commissioner of Central Excise and Customs Vs. The Customs Excise and Gold (Control) appellate Tribunal, and M/s. Lloyds Steel Industries Central Exicse Reference No. 5/2004, date of pronouncement 24/10/2007- High Court of Bombay- Bench of Nagpur. 5. We have considered the submissions made by the Counsel for the rival parties and perused the records and Judgments relied upon. In our opinion, the issue raised in the present reference is squarely covered by the judgment of the Apex Court in Commissioner of Central Excise Vs. Jawahal Mills Ltd. [2001(132) ELT 3(SC). In paragraphs 4 and 5 of the said judgment, the Apex Court has observed as under: 4. The aforesaid definition of Capital goods is very wide. Capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances. Any of these goods if used for producin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of ammonia and the raw naphtha used for the manufacture thereof is entitled to the duty exemption. 6. The Tribunal has held that the cement, steel plates and bars in respect of which modvat credit has been availed of by the respondent no. 2 have been used for providing support to machines. This is a pure findings of fact recorded by the Tribunal which cannot be said to be perverse and, therefore, binding. In view of the clear ratio laid down by the Apex in the case of Jawahar Mills Ltd(supra) we find no illegality in the order passed by the Tribunal. Since the issue is squarely covered by the judgment of the Apex Court in the case of Jawahar Mills Ltd., in our opinion, no substantial question of law is involved in the present references. On this ground only the references are deserved to be rejected. We do not deem it necessary to deal with the other submissions made by the learned counsel for the parties. In view of the above, all the references are rejected (d) Mundra Ports Special Economic Zone Ltd 6. Before deciding the question, we deem it appropriate to extract Rule 2(k) and 2(l) of the Cenvat Credit Rules 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s neither having any factory nor he is manufacturer. The appellant is a service provider of port. We need not go into this question as to whether the appellant is a factory or manufacturer or service provider in view of the fact that it is not disputed by Mr.Y.N.Ravani, learned counsel appearing for the revenue in this Tax Appeal that the appellant provides service on port for which he is getting jetty constructed through the contractor and the appellant has claimed input credit on cement and steel. The cement and steel were not included in Explanation 2 from 2004 upto March 2006. The Cenvet Credit Rules 2004 were amended in exercise of the powers conferred by section 37 of the Central Excise Act 1944 with effect from 7.7.2009, the date on which it was notified by the Central Government from the date of the notification. According to learned counsel for the appellant, this amended definition would apply only to the factory or manufacturer and would not apply to the service provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manufacturer and he has only constructed jetty by use of cement and steel for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited Vs Union of India and others, reported in (2011) 11 SCC 408 = 2011-TIOL-31-SC-CX would not be applicable to the facts of the instant case. 9. Mr.Ravani has also vehemently urged that since jetty was constructed by the appellant through the contractor and construction of jetty is exempted and, therefore, input credit would not be available to the appellant as construction of jetty is exempted service. The argument though attractive cannot be accepted. The jetty is constructed by the appellant by purchasing iron, cement, grid etc. which are used in construction of jetty. The contractor has constructed jetty. There are two methods, one is that the appellant would have given entire contract to the contractor for making jetty by giving material on his end and then make the payment, the other method was that the appellant would have provided material to the contractor and labour contract would have been given. The appellant claims that he has provided cement, steel etc. for which he was entitled for input credit and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the manufacturer of final products. TABLE S.No Description of capital goods falling within the schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and used in the factory of the manufacturer Description of final products (1) (2) (3) 1 .. 2 .. 3 All goods falling under chapter 85 (other than those falling under heading Nos. 85.09 to 85.13, 85.16 to 85.31, 85.39 and 85.40); 4 .. 5 components, spares and accessories of the goods specified against S. Nos. 1 to 4 above; 9. The language of Rule 57Q is clear and unambiguous. It applies to the final products described in column (3) of the Table under the Rule as also to other goods, referred to as capital goods , described in the corresponding entry in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e satisfied to find out whether or not particular goods could be said to be capital goods, would apply on all fours to the facts of the present case, in fact, in para 6 of the said judgment, the court noted the stand of the learned Additional Solicitor General, appearing for the Revenue, to the effect that the question whether an item falls within the purview of capital goods would depend upon the user it is put to. 13 . Applying the user test on the facts in hand, we have no hesitation in holding that the steel plates and M.S. channels, used in the fabrication of chimney would fall within the ambit of capital goods as contemplated in Rule 57Q. it is not the case of the Revenue that both these items are not required to be used in the fabrication of chimney, which is an integral part of the diesel generating set, particularly when the Pollution Control laws make it mandatory that all plants which emit effluents should be so equipped with apparatus which can reduce or get rid of the effluent gases. Therefore, any equipment used for the said purpose has to be treated as an accessory in terms of Serial No. 5 of the goods described in column (2) of the Table below Rule 57Q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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