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2015 (10) TMI 1838 - CESTAT AHMEDABAD

2015 (10) TMI 1838 - CESTAT AHMEDABAD - TMI - Admissibility of Cenvat Credit - Capital goods - Held that:- Items like MS Plates, Beams, Channels, Angles etc., when used in the repair of the capital goods would be eligible for cenvat credit but the same item when used in the making of support structures will not be eligible to Cenvat Credit. - items are only used for maintenance and repairs of their capital goods and not for making supporting structures. Reliance placed by the Learned Consultant .....

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certificate to the adjudicating authority to the effect that the inputs for which Cenvat Credit is claimed are used only in the maintenance and repair of the capital goods. Needless to say that the Adjudicating Authority shall give an opportunity of personal hearing to the appellant before deciding the case in the remand proceedings.

So far as imposition of equivalent penalty upon the appellant is concerned, it is observed that the issue of taking of Cenvat Credit on the impugned item .....

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, Authorised Representative Per : Mr. H K Thakur; This appeal has been filed by the appellant with respect to OIA No 80/2012-AHD-ICE/AK/COMMR-A-/AHD dt 28.9.2012 issued on 1.10.2012. Under this OIA the first Appellate Authority has upheld the OIO dt 29.2.2012 passed by the Adjudicating Authority. A demand of ₹ 78,911/- has been confirmed by the Adjudicating Authority by disallowing Cenvat Credit under Rule 14 of the Cenvat Credit Rules 2004 alongwith interest. An equivalent amount of penal .....

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s components or as functional attachments. Learned Consultant made the Bench go through the list of such items duly verified by the jurisdictional Superintendent to argue that use of these items are is in the repair of capital goods or these items are used in making of Ladder etc. which are functional necessities of capital goods. It was firmly argued by the Learned Consultant that if the items are used in the repairs of capital goods then the cenvat credit is admissible as per the judgement of .....

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e the Bench go through Para 24 of the judgement of the Apex Court in the case of Saraswati Sugar Mills vs CCE, Delhi III (supra) to bring home the point that the credit of inputs used in making of support structures is not admissible. On a specific query from the Bench, Learned Consultant appearing on behalf of the appellant submitted that no certificate from a Chartered Engineer was produced before the lower authorities to claim as to where is the use of the items for which credit is claimed. 4 .....

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goods. Learned Authorised Representative has relied upon the case laws of Birla Corporation Ltd Vs CCE, Jaipur (supra). It is observed that this case law in Para 3.1 and 4 it was upheld that Cenvat Credit with respect to MS Plates, Beams, Angles, Channels etc used for repairs and maintenance of capital goods is admissible as Cenvat Credit. Para 3.4 and 4 of the case law has also given observations that the same items when used for making supporting structure of the capital goods are not eligible .....

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81 (S.C.) where the appeal preferred by the Revenue is dismissed. The facts in the said case were that the respondent-assessee availed MODVAT credit on steel plates and M.S. channels, as capital goods in terms of Serial No. 5 of the Table given below Rule 57Q, used for erection of the chimney for the diesel generating set. The parties were ad idem that diesel generating set falls under chapter Heading 85 which is mentioned at Serial No. 3 of the Table and also the chimney is an accessory in term .....

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erating set in the light of the Pollution Control laws mandating that all plants emitting effluents should be equipped with apparatus to reduce or get rid of effluent gases. We are afraid that this decision would assist the appellants in support of the contention canvassed. In this instant case, the Court was considering whether steel plates and M.S. Channels used in fabrication of chimney for diesel generating sets are entitled to avail of MODVAT credit by treating them as capital goods in term .....

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thin the ambit of the expression capital goods . 24.In Simbhaoli Sugar Mills Ltd. v. Commissioner of Central Excise, Meerut, 2001 (135) E.L.T. 1239 (Tri.-Del.), the appellant is a manufacturer of sugar and availed a MODVAT credit on the joints, channels, angles and MS Beams used in fabricating supporting structures for installation of equipments such as vacuum pan, crystallizers, sugar grader, elevator, etc., HR plates (black steel) are used in boiler of sugar plant to keep temperature high, MS .....

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s machineries of the sugar plant are capital goods in terms of the Rule 57Q. The Tribunal while allowing the MODVAT credit found that these items, except MS sections and shapes, used for raising structure to support the various machines, parts of machineries of the plant would be covered by the explanation to Rule 57Q as a capital goods. The Tribunal referred to its own decision in Malvika Steel Limited s case [1998 (97) E.L.T. 530 (Tribunal)] and without semblance of any discussion, has partly .....

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