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2023 (4) TMI 321 - AT - Central ExciseCENVAT Credit - capital goods - structures which are fabricated from the subject goods - assessee failed to prove that structures fabricated from the subject goods satisfy the ‘description’ or ‘classification’ prescribed in the definition of ‘capital goods’ in Rule 2(a) of the CENVAT Credit Rules - present dispute pertains to 2005-06 to August 2008 - HELD THAT:- From the perusal of the circulars dated 2-4-2012 and 18-5-2012, it comes out that these circulars have been issued in the changed context of the definition of [Rule] 2(k) of Cenvat Credit Rules, 2004 and both circulars have no concern for the period in issue. Thus, we find that the reliance placed by the Revenue in this regard has no substance. The Madras High Court in THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. INDIA CEMENTS LIMITED & OTHERS [2011 (8) TMI 399 - MADRAS HIGH COURT] noticed VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] but relied upon the Apex Court judgment in COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT], wherein the Apex Court has considered an issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set and after considering it, the Apex Court allowed the Cenvet credit on MS Rod, sheets, MS Channel, MS Plate, etc., used for fabrication of structures to support various machines/capital goods. In M/S. THIRU AROORAN SUGARS, M/S. DALMIA CEMENTS (BHARAT) LTD. VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2017 (7) TMI 524 - MADRAS HIGH COURT], a Division Bench of the Madras High Court specifically considered as to whether MS structural, (which support plant and machinery), cement and steel (which are used in erecting foundations to hold plant and machinery) are integral part of capital goods eligible for Cenvat credit under the Cenvat Credit Rules, 2004 prior to the amendment of Explanation 2 to Rule 2(k) by notification dated 7-7-2009. The Madras High Court has held that irrespective of whether ‘user test’ is test applied, or the test that they are an integral part of the capital goods is applied, all such items fell within the scope and ambit of both Rule 2(a)(A) and 2(k) and, therefore, Cenvat credit was to be allowed on such goods. The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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