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Dhampur Sugar Mills Ltd. Versus Commissioner of Central Excise, Meerut-II

2016 (8) TMI 492 - CESTAT ALLAHABAD

Cenvat credit - A.C. corrugated sheets, HR SS sheet - violation of the provisions of Rule 2 and 3 of CCR's - Held that:- it is found that HR SS plates have been used in the fabrication of storage tank of Ethyl Acetate. Further storage tank is a specified capital goods under Rule 2(a)(A)(vii) and as such the same is eligible for Cenvat credit. So far as AC corrugated sheet is concerned it is found that the same have been used in the boiler, without the use of which there can be no generation of s .....

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nufacturer of sugar and molasses is in appeal against Order-in-Appeal dated 27/6/2011 by which Cenvat credit on AC corrugated sheets used to cover the rubber belt of bagasse handling system through which the bagasse is feeded in the furnace of the boiler have been denied as well as on HR SS plate used for fabrication of the body of the storage tank of Ethyl Acetate in the chemical plant have been denied. 2. Vide the show cause notice dated 21/4/2010, the revenue objected to taking of Cenvat cred .....

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alty of equal amount was imposed under Rule 15 of CCR read with Section 11 AC of the Act. Further personal penalty ₹ 50,000 was imposed on Amit Sharma, Deputy General Manager (Commercial). Being aggrieved the appellant preferred appeal before ld. Commissioner (Appeals) who vide the tune of ₹ 26,533/- on aluminium sheet and aluminium coils and upheld the disallowance of Cenvat credit on AC corrugated sheet & HRSS plate, amounting to ₹ 1,05,292/-. 3. Being aggrieved the appel .....

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unal followed the ruling of Honourable Rajasthan High Court in the case of Hindustan Zinc Ltd 2000 214 E.L.T. 510 wherein the High Court have held that MS/SS plates used for repair and maintenance of machinery which are used for manufacture of final products are eligible for Modvat credit This Tribunal also held that there is no dispute that these items were used as raw materials of the capital goods and therefore there is no reason for denial of the credit on the items. It is further held that .....

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tank have been specifically mentioned as capital goods. So far as A.C. Corrugated Sheet is concerned it is explained that these are used in the bagasse handling system of 170 Ton boiler, wherein the sheets are used to cover the rubber belt of bagasse handling system through which the bagasse is fed it in the furnace of the boiler. The work of these corrugated sheets in bagasse handling system is to save the bagasse from moisture and rain, because in case the bagasse becomes wet or moist, the it .....

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ase there will be no generation of steam resulting into stoppage of the production of excisable goods. Accordingly it is stated that this forms component of the boiler system and is essential for manufacture of excisable products. It is further urged that the ld. Commissioner have erred in denying the credit observing that the same is used as roofing material to protect the capital goods which is neither covered under the definition of capital goods nor is used as an input of the final product. .....

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