TMI Blog2016 (1) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... s etc. used in the erection of various machineries such as electrostatic precipitator for raw mill project, additional fly ash handling system, MMD crusher, etc. can be considered as eligible for cenvat credit as component of capital goods. The Hon’ble High Court held after examining the various case laws in favour of assessee. Applying this principles, we find that the allegation in the show cause notice that steel items used by the appellant are neither components nor spares nor accessories is not sustainable. Applying the principle of “user test” laid down by the Hon’ble Supreme Court in Jawahar Mills case (2001 (7) TMI 118 - SUPREME COURT OF INDIA ) the angles, beams and channels used in the making and fabrication of these capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is before us. 2. The main plea of the appellant is that iron and steel items used for fabrication of components / accessories of various machinery like rotary klin, rotary cooler, conveyor systems, raw material preparation plant, power plant and pollution control equipment are rightly eligible for Cenvat credit as they are specifically covered under Rule 2(a)A (i) (ii) and (iii). They have emphasized that they have taken cenvat credit only on those items which were used for fabrication of parts, components, accessories of various capital goods as defined under Rule 2(a) of Cenvat Credit Rules. These components and accessories do come into existence before their installation and as such credit cannot be denied even if it is cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R, on the other hand reiterated the finding in the impugned order and stated that cenvat credit cannot be allowed for steel items used in fabricating various structurals in the factory if the resultant product is an immovable product, ineligible to be called as goods. As such, the question of allowing the credit for fabricating items other than goods does not arise. 5. Heard both the sides and examined the appeal records carefully. 6. The issue regarding the eligibility of steel items namely, bars, flats, channels and sheets used for fabrication of machinery and accessories has been the subject matter of dispute in various cases of similar nature. It is relevant to note here certain basic principles laid down by the Hon ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods. The Hon ble Karnataka High Court in the case of SLR Steels Ltd. [2012 (280) ELT 176 (Kar)] held as under: 7. A perusal of the aforesaid provision makes it very clear though storage tanks may be immovable property and the pollution control equipment are included within the definition of capital goods, input as defined in Rule 2(k) makes it clear that input includes in goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. Therefore, the input is not necessarily to be used in the manufacture of final product. By virtue of explanation 2 - goods used in the manufacturer of capital goods which are further used in the factory of the manufacture also falls within the definition of inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat credit by the assessee notwithstanding the fact that the storage tank is an immovable property. 8. The Hon ble Madras High Court in the case of CCE vs. India Cements Ltd. [2014 (310) ELT 636 (Mad)] held that MS plates, angles, channels etc. used in the erection of various machineries such as electrostatic precipitator for raw mill project, additional fly ash handling system, MMD crusher, etc. can be considered as eligible for cenvat credit as component of capital goods. The Hon ble High Court held after examining the various case laws in favour of assessee. Applying this principles, we find that the allegation in the show cause notice that steel items used by the appellant are neither components nor spares nor accessories is not s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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