TMI Blog2013 (10) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... does not fall under the category of capital goods as per the definition clause and since the cement was used in the construction of foundation, it cannot be said to be eligible capital goods in terms of Rule 2(b) of the Cenvat Credit Rules, 2002 and the cement cannot be said to be inputs in terms of Explanation II of Rule 2(g) of the Rules, 2002. The Tribunal has erred in allowing the appeal filed by the respondent-assessee. In our view, the Tribunal has committed substantial error of law in allowing the appeal of the respondent-assessee by holding that the assessee is entitled for getting benefit of Cenvat Credit on cement - the foundation cannot be described as capital goods as per Rule 2(b) of the Cenvat Credit Rules, 2002, and it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of filling the gapes in the form of cut and fill for excavation of ores; and obviously, cement had been used as a construction material so as to provide safety to the roof of mining area. According to the appellant, cement being a construction material, is not eligible as input for availing Cenvat Credit under Rule 2 (g) of the Rules of 2002. A show cause notice was issued to the respondentassessee proposing recovery of credit so taken on cement alongwith interest and penalty. The matter in the said show cause notice was decided by the Assistant Commissioner, Central Excise Division, Udaipur in his Order-in-Original No.696/2004-CE dated 25.08.2004 confirming the demand with interest but without imposing penalty. Being aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct and hence, no Cenvat Credit is available so far the cement is concerned. This Court has specifically held that the foundation made of cement does not fall under the category of 'capital goods' in terms of Rule 2(b) of the Rules of 2002; and cement cannot be said to be inputs in terms of Explanation-II to Rule 2(g) of the Rules of 2002. This Court has, inter alia, observed and held as under:- We have heard learned counsel for the parties. While deciding D.B. Central Excise Appeal No. 75/2006 (Union of India Vs. M/s. Hindustan Zinc Ltd.), we have held that cement being a building material used for the purpose of building construction cannot be said to be an input used for manufacturing of final product and that no Cenvat Credit is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be said to be inputs in terms of Explanation II of Rule 2(g) of the Rules, 2002. Considering the aforesaid aspect of the matter, in our view, the Tribunal has erred in allowing the appeal filed by the respondent-assessee. In our view, the Tribunal has committed substantial error of law in allowing the appeal of the respondent-assessee by holding that the assessee is entitled for getting benefit of Cenvat Credit on cement. In our view, the foundation cannot be described as capital goods as per Rule 2(b) of the Cenvat Credit Rules, 2002, and it cannot be said that the same is used in connection with manufacturing of goods, which are further used for the manufacture of the ultimate product. Accordingly, this appeal is allowed. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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