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2016 (7) TMI 769 - CESTAT HYDERABAD

2016 (7) TMI 769 - CESTAT HYDERABAD - 2016 (340) E.L.T. 724 (Tri. - Hyd.) - Cenvat Credit on capital goods - boilers and Water Treatment Plant (WTP) not installed within the factory premises of appellant but in the neighbouring unit - Held that:- Undeniably the WTP is an essential part of the manufacturing process undertaken by appellants. Further the definition of factory as contained in Section 2(e) of CEA, 1944 does not anywhere use the word 'registered premises'. Registration of the premises .....

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- 10-6-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri B.V. Kumar, Advocate for the appellant. Shri Vikram Kaushik, Asst. Commissioner (AR) for the respondent. ORDER The appellant, M/s Lakshmi Gayatri Iron & Steel (P) Ltd., is engaged in manufacture of sponge iron and are availing facility of CENVAT credit on inputs and capital goods. They had taken credit on capital goods viz. boilers and Water Treatment Plant (WTP). 2. A show-cause notice dt. 05/05/2008 was issued to appellant for i .....

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he Order-in-Original dt. 31/03/2009, the department filed an appeal before the Commissioner(Appeals) on the grounds that the said WTP was not installed in appellant's premises. The Commissioner(Appeals), while set aside the Order-in-Original relating to dropping the demand and remanded the case for denovo adjudication by the original authority. It he de novo proceedings vide order dt 16/08/2010, credit of ₹ 3,38,749/- taken by appellant on WTP installed in the premises of M/S. Gayatri .....

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e the assessee is now before the Tribunal. 3. The learned counsel Shri B.V. Kumar appearing for the appellant submitted that GAIPL is a power generation unit of the appellant, thus a sister concern. During the initial years of functioning, the gases, fumes and dust generated in the course of production of sponge iron was let out in open air through high chimney. The villagers in the surrounding complained. As suggested by experts, appellant purchased additional equipments to solve the issue of p .....

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n GAIPL and the WHRB installed within the appellant's factory are connected with pipes. Water is required to cool waste gases which are put into WHRBs. This water is fed into WHRB from the WTP. If hard water is fed without treatment, then scales of salts of Magnesium and Calcium would be formed and WHRB will get corroded. The hard water is first treated in WTP before being fed into WHRB through pipelines. In the WHRB, while waste hot gases are cooled, steam is generated. Such steam from the .....

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in the Central Excise Act, 1944 which is as under:- Section 2(e), "factory" means "any premises including the precincts thereof, wherein Of in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods, is being carried on Of is ordinarily carried on". The counsel for appellant urged that the definition means any premises and includes the precincts thereof wherei .....

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The learned counsel for appellant stressed on the word precincts' used in the definition of factory. He drew support from the judgment laid in South Eastern Coal Fields Ltd. Vs. CC&CE, MP [2006(200) ELT 357 (SC)] where it is observed as under:- 24. In other words, we have to interpret the word precinct in the exemption notification to mean the surrounding region or area, as defined in Collins English Dictionary or the surroundings or environs of a place as defined in the New Shorter .....

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a mine for the purpose of grant of exemption, as that would encourage the mining industry. I do not find myself in agreement with the reliance placed by the learned counsel on the said judgment. The Hon'ble Apex Court in the said case was interpreting Sectyion 2 (j) of the Mines Act, 1952. Being the word (precincts) used in the definition of another enactment, I do not think that the same can be referred or applied herein. 7. Another judgment placed by Shri B.V. Kumar is Konark Met Coke Ltd. .....

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