TMI Blog2012 (4) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... which process, in the present case, has been described as repairs and maintenance (reconditioning) - Cenvat Credit allowed. - in favour of respondent. Credit availed for fabricating supporting structures which in turn were used for erection of capital goods – Held that:- the appellant has a valid point in as much as, in the case of Saraswati Sugar Mills - 2011-TMI-204794-SUPREME COURT OF INDIA the Hon ble Supreme Court refused to recognize a structural support as capital goods under Rule 57Q of the erstwhile Central Excise Rules, 1944 - with the result that angles, sheets, plates, etc. in this case cannot be held to have been used as inputs in the manufacture of capital goods – in favour of Department. Whether the respondents are li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of penalty was also imposed on the assessee. A separate penalty of Rs.10,000/- was imposed on the authorized signatory of the company. The company and its authorized signatory preferred an appeal to the Commissioner (Appeals) and the latter passed the impugned order setting aside the demand of duty and vacating all the penalties. 2. On a perusal of the records and hearing both sides, I note that it is not in dispute that the plates, sheets, angles, coils, etc. were used to the quantitative extent and in the matter stated below. (a) 25.810 MTs used for fabricating capital goods viz., Fly Ash Silo, Fine Coal Hopper, etc.; credit availed Rs.1,17,383/-. (b) 72.069 MTs used for reconditioning of plant and machinery; credit ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excisable goods and hence would not be covered under the definition of capital goods and the materials used in its fabrication could not be inputs eligible for CENVAT credit. In this connection, the appellant relies on the Supreme Court s judgment in CCE, Indore vs. Virdi Brothers: 2007 (207) ELT 321 (SC). Learned Superintendent (AR) has also made submissions to the same effect. 5. On the contrary, the submission of the Chartered Accountant is that the respondent is entitled to the benefit of the Second Explanation to the definition of input under Rule 2(k) of the CCR, 2004, which (as it stood during the period of dispute) reads thus: input used in the manufacture of capital goods which are further used in the factory of the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioning of plant and machinery, the respondent appears to have a formidable case based on the Second Explanation to the definition of input under Rule 2(k). The learned consultant has endeavoured to invoke the main part of the definition itself, wherein the phrase used in or in relation to the manufacture of final products were directly or indirectly contained in final product or not exists. I have not found substance in the arguments based on the main part of the definition inasmuch as that part of the definition deals with relation between input and manufacture of excisable goods, which are cleared out of the factory. There must be clear distinction between capital goods, inputs and final products. The term final products cannot be inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent s case is squarely supported by the Second Explanation to the definition of input . Therefore the issue is held in favour of the respondent. 9. On the third issue (whether the structural materials used to fabricate structural support for erecting capital goods can be considered to be inputs for the purpose of CENVAT credit), I have found no merit in the submissions made on behalf of the respondent. On this issue, the appellant has a valid point inasmuch as, in the case of Saraswati Sugar Mills (supra), the Hon ble Supreme Court refused to recognize a structural support as capital goods under Rule 57Q of the erstwhile Central Excise Rules, 1944. If the structural support by itself cannot be capital goods, the structural material ..... X X X X Extracts X X X X X X X X Extracts X X X X
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