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2016 (1) TMI 516 - CESTAT NEW DELHI

2016 (1) TMI 516 - CESTAT NEW DELHI - TMI - Cenvat Credit in respect of power plant - it was revealed that the appellant has availed cenvat credit on imported capital goods namely, boiler parts, condenser, H P Heater, ESP, Steam Turbine and generator on the strength of Bills of Entry - goods used outside the factory of manufacture of final product for generation of electricity for captive use within the factory prior to 31.3.2011 - Held that:- The thrust of the learned AR is on the definition of .....

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n that the inputs has been used in the factory, therefore, the appellant is entitled to take cenvat credit.

We also note that on these capital goods, the appellant has taken cenvat credit only on 28.11.2011. At the time of availment of cenvat credit, the provisions of Rule 2A (1A) were in force and there is no bar for availment of cenvat credit at that point of time. - Credit allowed - Decided in favor of assessee. - Excise Appeal No. 3572 of 2012 - FINAL ORDER NO. A/ 52568 /2015-EX( .....

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MW capacity at plot No. A-42 to 47, SIDA, Sathariya, Jaunpur. Admittedly, the said power plant is outside the factory premises i.e. 250 mts. Away from manufacturing plant. The said power plant is installed for generation of electricity which in turn is to be used by the appellant for manufacturing of MS ingots, bars and TMT bars. 3. The officers of Anti-evasion wing of Central Excise department visited the factory premises of the appellant on 17.1.2012 and 18.1.2012 and verified the records rela .....

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d that as per notification No. 3/11 CE (NT) dated 1.3.11 which was effective from 1.4.2011 clarifies thedefinition of capital goods which means the following goods used outside the factory of manufacture of final product for generation of electricity for captive use within the factory. Therefore, the capital goods which were procured by the appellant prior to 31.3.2011, do not qualify as capital goods, therefore, the appellant is not entitled to take cenvat credit. Consequently, the impugn .....

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dicial pronouncements namely in the case of Vikram Cement [2006 (194) ELT 3 SC]; Madras Cement Ltd. [2010 (257) ELT 321 (SC)]; and Hindalco Industries Ltd. [2014 (313) ELT 311 (Tri-Del)]. He further submits that appellant has availed cenvat credit on 28.11.2011 and at the time of availment of cenvat credit, the definition as per Rule 2 (a) of Cenvat Credit Rules, 2004 was in force, therefore, there is no bar under the provisions of Cenvat Credit Rules, 2004 to take cenvat credit on these goods. .....

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ntitled to take cenvat credit. Infact as per the decision of this Tribunal in the case of Grasim Industries Ltd. [2004 (176) ELT 265 (Tri-Chennai)], the date of receipt of goods in the factory is the relevant date for availment of Cenvat Credit which was affirmed by the Honble Apex Court reported in [2005 (179) ELT A 38 SC]. Therefore, he submits that adjudicating authority has rightly denied the cenvat credit to the appellants. 6. Heard the parties. Considered the submissions. 7. On going thro .....

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t Rule 57B commences with a non obstante clause. It allows credit to be taken by a manufacturer on inputs used in or in relation to the manufacture of the final products whether directly or indirectly and whether contained in the final products or not. There is no qualification as to where the inputs must be used in the main body of sub-rule (1). Qualifications have been introduced to the extent stated in Clauses (i) to (vi) read with the Explanation. Thus Clause (i) provides for inputs which ar .....

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of production means only such generation of electricity or steam which is used within the factory would qualify as an intermediate product. The utilization of inputs in the generation of steam or electricity not being qualified by the phrase within the factory of production could be outside the factory. Therefore, whatever goes into generation of electricity or steam which is used within the factory would be an input for the purposes of obtaining credit on the duty payable thereon. As far as th .....

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of Vikram Cement (supra), the Honble Supreme Court observed as under: 3. As regards the Modvat/Cenvat credit on capital, goods, if the mines are captive mines so that they constitute one integrated unit together with the concerned cement factory, Modvat/Cenvat credit on capital goods will be available to the assessee. On the other hand, if the mines are not captive mines but they supply to various other cement companies of different assessees, and it is found that the said goods were being use .....

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ute in this case is as to whether the inputs and capital goods used for generation of power in Renusagar Power Plant, would be eligible for Cenvat credit, even though the power plant is not located within the factory premises and it is located at distance of about 40-50 kms. from the factory. There is no dispute about the fact that though initially the power plant was owned by M/s Renusagar Power Company, this company has been amalgamated with the appellant company in the year 1993 and the merge .....

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Vikas Industrial Gas v. CCE, Allahabad (supra) pleads that the captive power plant located far-away from the factory cannot be treated as part of the factory and inputs and capital goods used therein would not be eligible for Cenvat credit, the appellant rely upon the two judgments of the Apex Court in the case of Vikram Cement v. CCE, Indore reported in 2006 (194) E.L.T. 3 (S.C.) and 2006 (197) E.L.T. 145 (S.C.). The Apex Court in the case of Vikram Cement v. CCE, Indore reported in 2006 (194) .....

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ine and that utilization of input only within the factory premises is not necessary. In para 4 of this judgment with regard to the admissibility of Cenvat credit in respect of the inputs used for the generation of power or steam for use in the factory, the Apex Court interpreting the provisions of Rule 57B observed as under :- It appears to us on a plain reading of the clause that the phrase within the factory of production means only such generation of electricity or steam which is used within .....

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n 57A. There is no dispute that both explosives and lime stone are notified under Section 57A for manufacture of final product viz. cement. 6.1 In this judgment, the Apex Court over-ruled its earlier judgment in the case of CCE v. J.K. Udaipur Udyog Ltd. - 2004 (171) E.L.T. 289 (S.C.). 6.2 The Apex Court in its subsequent judgment in the case of Vikram Cement v. CCE, Indore reported in 2006 (197) E.L.T. 145 (S.C.) again held that the explosives, lubricating oil and capital goods used in the mine .....

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