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WHETHER CABLE UNDER CHAPTER 85 IS ACCEPTED AS CAPITAL GOODS BY CE DEPARTMENT

Central Excise - Started By: - PRADEEP GARG - Dated:- 29-10-2015 Last Replied Date:- 3-11-2015 - Dear Sir, We are SHIS Scrip holder granted by DGFT, for procurement of any capital goods under chapter 82, 84, 85 & 90 of CE Tariff Act without payment of duty but to be debited from the scrip as per procedure laid under Notification No. 33/2012-CE dated 09.07.2012. We intend to procure huge cable under chapter 8544 for installation 33KVA station inside our factory. When we approached one of the .....

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means All goods falling under chapter 82, 84, 85, 90 of the first schedule to the Excise Tariff Act. ………….. Components, spares and Accessories of the goods specified at (i) and (ii) From the above, it is quite clear that if any item having any nature falls under above said tariff chapters, they are by default covered under the definition of CG. As far as explanation (A) for the purpose of Notification No. 33/2012-CE, capital goods means any plant, machinery…&h .....

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the factory, cable qualifies for the definition of 'Capital Goods' under Rule 2 of CCR, 2004 as well as Notification No.33/12-CE dated 09.7.2012 inasmuch as KVA station cannot operate without cable. It also conforms to the condition of being inside the factory.Thus there is not even an iota of doubt about its (cable's) eligibility as capital goods. In case the department thinks otherwise, there is no other option but to face litigation. I am of the view that ultimately you will get s .....

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he factory and it cannot run without cable. You are to search case laws proving that 33 KVA station is an integral part of the factory. Hence capital goods. Cable attached to KVA station is covered under Rule 2 (a) (iii) of CC Rules. Hence cable also capital goods. - Reply By PAWAN KUMAR - The Reply = Dear Sir, Rule 2(a) of CCR, 2004 provides definition of capital goods which also covers chapter of 85. Now the question is LTU Range Officials are not considering the chapter wise goods viz. cable .....

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al goods under relevant notification as well as Cenvat Credit Rules. Thereafter, you can file appeal with the Commissioner (Appeals). You can file appeal even against a simple from the concerned officer. - Reply By PRADEEP GARG - The Reply = Dear Sir,In fact as of now we are just in process of discussion with the supplier that whether they are ready to supply the cables under chapter 85 under SHIS Scrip without excise duty treating it as CG since their juris......Exc...department is not treating .....

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. In our opinion you cannot procure 33KVA Cable against SHIS Scrips. Please refer the SHIS Scheme and the definition of Capital Goods as mentioned in the Chapter 9 of the FTP 2009-2015 and 2015-2020 in this regard to get the clarification. Regards, YAGAY and SUN TMI ID= 266252 2015 (10) TMI 1527 - CESTAT CHENNAI Sree Rayalaseema Hi-Strength Hypo Ltd. Versus Commissioner of Customs (Exports) , Chennai Benefit of Status Holders Incentive Scrip scheme - Appellants imported goods under Status Holder .....

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tion 104/09 is for purpose of up-gradation of technology and also it is sector specific - What is imported by appellants are accessories of Steam Turbine Generator used in generation of steam which in turn used for generating electricity whereas SHIS is applicable only for import of capital goods for Basic Chemical Industry - Import of accessories for Steam Turbine Generator cannot be considered as up-gradation of technology of capital goods of chemical industry - Therefore, appellants are not e .....

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peals). 2. The brief facts of the case are that appellants have imported accessories for 10 MW Steam Turbine Generator Set under Bill of Entry No.8250437 dt.18.10.2012. The goods were imported under Status Holders Incentive Scrip (SHIS) scheme and claimed benefit of Notification No.104/09 dt.14.9.2009. The adjudicating authority denied the benefit of notification as the goods were not covered under SHIS scheme as the goods are not related to chemical industry and it is only for generation of ele .....

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efinition in the notification for capital goods allows goods which are directly and indirectly used in the manufacture of the goods. Since generation of electricity is essential steam and the turbine is used for generation of steam which in turn used for generation of electricity and the electricity so generated is consumed in their factory. Therefore, the accessories of steam turbine are covered under the definition of capital goods. 3. On the other hand, Ld. AR submits that objective of the sc .....

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. Further he submits that goods imported are accessories of steam turbine not capital goods, generator and these are parts and accessories of capital goods for up-gradation of chemical industry. He submits that notification benefit is rightly denied and goods are not related to either up-gradation of the capital goods of the chemical industry or these are parts or accessories of capital goods. 4. After hearing the submissions of both sides, we find that the short issue in this case relates to wh .....

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1, of these specified sectors, in the form of duty credit. This shall be over and above any duty credit scrip claimed / availed under this Chapter. 3.16.2 Status Holders availing Technology Up-gradation Fund Scheme (TUFS) benefits (Under Ministry of Textiles during a particular year shall not be eligible or the Status Holder Incentive Scrip for exports of that year. 3.16.3 The Status Holder Incentive Scrip shall be with Actual User Condition and shall be used for imports of capital goods (as def .....

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sic chemicals (excluding pharma products) 5. It is evident from the above FTP, the SHIS Scrip is issued to the manufacturer of specific sector for import of capital goods for up-gradation of technology. Para 3.16.4 at Sl.No.6 Basic chemical industry (excluding pharmaceutical industry) is listed as specified sector. It is evident that the import of capital goods under SHIS scrip, under Notfn. 104/09 dt.14.9.2009 is for the purpose for up-gradation of technology and also it is sector specific. In .....

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hemical factory is beyond justifiable for the reasons that SHIS scrip not admissible for capital goods which are not related chemical industry. It is clearly stipulated in para 3.16.4 of FTP the sectors to which SHIS is extended and the main objective of the scheme is to upgrade the technology of chemical industry. In the present case, the SHIS scheme is eligible for import of any parts and accessories or capital goods or up-gradation of their technology in so far as it relates to plant and mach .....

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same whether it is under Para No.9.08 of FTP for 2009-14 or Para No.9.12 of FTP for 2015-20 or Notification No.33/12-CE dated 09.7.2012 or 104/2009-Customs dated 14.9.2009. There has been no change at all. Facts and circumstances of each case are NOT always the same. Hence the judgement dated 12.6.2015 of CESTAT Chennai may not be applicable in your case. The judgement talks of Notification No.104/2009-Customs and NOT of Notification No.33/2012-CE dated 09.7.2012. This notification is not subje .....

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of Capital Goods for the purpose of benefits of SHIS Credit Scrip. In case any holder (manufacturer) of SHIS scrip is to fulfill the condition of Technological up-gradation in pursuance of the above mentioned judgement of CESTAT, Chennai, that is not feasible without power generating set (33 KVA station in your case) inasmuch as factories engaged in the manufacture of chemicals, electronic goods, textile etc. function 24 hours without any break. Therefore, first aim is to start the factory and c .....

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fter the issue of Technological up-gradation arises. The words, directly or indirectly mentioned in the definition of Capital Goods are also very much meaningful. De facto, 33 KVA station lays the foundation for technological up-gradation of the product. You are not seeking exemption from Central Excise duty; you are seeking the route to debit duty via scrip. Hence Govt. revenue is not at stake at all. Last but not the least, needless to say conditions laid down in SHIS credit scrip are to be fu .....

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