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2016 (8) TMI 534 - CESTAT ALLAHABAD

2016 (8) TMI 534 - CESTAT ALLAHABAD - 2016 (344) E.L.T. 894 (Tri. - All.) - Refund claim - Cenvat credit wrongly paid under protest - capital goods received by them during the period in question were actually used for the manufacture of capital goods - non-submission of clinching evidence that the said items were used in the manufacture of capital goods - Held that:- it is an admitted fact that the appellant have enhanced their installed capacity of production from 5000 M. T. to 15,000 M. T. whi .....

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st on 1/4/13, with interest as per Rules. - Decided in favour of assessee with consequential relief - Ex. Appeal No. 55730/14 - Final Order No. 70354/2016 - Dated:- 7-1-2016 - Mr. Anil Choudhary, Member (Judicial) Ms. Rinki Arora, Adv. for the Appellant (s) Shri Chatru Singh, Asstt. Commr. (A.R.) for the Respondent ORDER The appellant is a manufacturer of Kraft paper and is in appeal against order in appeal dated 25/4/14 passed by the Commissioner (Appeals) Central Excise, Meerut I. 2.1 The issu .....

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o. 02 dated 1/4/13, under protest, which was informed to the Range Office and for the balance amount of ₹ 17,93,114/- did not accept Revenue's proposal. 2.2 Show cause notice had been issued, whereas the appellant filed a refund claim on 23/4/13 with the Deputy Commissioner requesting therein to allow them to take back the credit of the amount of ₹ 5,70,549/- debited under protest on 1/4/13 wrongly, as the capital goods received by them during the period in question where actuall .....

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ery item used by them for the purpose, since entitlement of Cenvat credit was governed by the relevant provisions of CCR 2004 as it existed during the period concerned. 3. Being aggrieved the appellant carried the matter before the Id. Commissioner (Appeals) who, vide the impugned order was pleased to reject the appeal observing that the claim of the appellant under the category of capital goods on the ground that the items in question were used in the manufacture of capital goods and therefore .....

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under invoice as required under Rule 11 of CER or their ER I returns for the period April, 2008 to March, 2009. So far the contention of the appellant is concerned that the adjudicating authority has not considered the documentary evidence available on record namely, issue slips, copy of RG-I showing production of capital goods and parts thereof duly supported by Certificate of Chartered engineer who has certified that the capital goods have been installed in the factory premises and are used i .....

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g had visited the factory premises of the appellant after almost two years of manufacture of plant and machinery and thus, has not witnessed the fabrication of the said claimed of capital goods out of the impugned items. Accordingly, the said Certificate is doubted and held not reliable. Further, the material issue slips et cetera were held to be the private records of the appellant. 4. Being aggrieved, the appellant have carried the matter before this Tribunal on the ground that the order of Co .....

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23,06,106/- + ₹ 5,70,549/-)under similar facts and circumstances for similar capital goods fabricated in the course of expansion of the installed capacity of the unit of the appellant, the Id. Commissioner (Appeals) have been pleased to allow the Cenvat credit observing as follows: - "The main issue for decision before me, in the instant case, is whether credit on MS. Angle, Plates, Sheets, Channels and Section etc. is admissible to the appellant or not as they are not covered under .....

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angles, Channels, centrally twisted deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods)'. The appellant has contended that they had requested the department for amendment in their Central Excise Registration in respect of various items to be used or the manufacture of machinery for making paper or paper board, others paper cutting machine and par .....

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eel items and plant and machinery fabricated from these inputs and regarding usage they submitted, the itemwise details duly certified by Shri Rajiv Jain & Associates, Chartered Engineer. In this regard the adjudicating authority in the impugned order has accepted the contention of the appellant in above para but has held that the monthly return filed by the appellant do not show either the production of the claimed capital goods or its clearance for captive consumption under excise invoices .....

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by the chartered engineer and it clearly mentions the quantity of items used in the fabrication of capital goods and the usage of the iron and steel items in question can easily be identified from it. Further I find no reason to doubt or disbelieve the subject certificate as far as the fabrication of capital goods and their use is concerned. I find that the appellant failed to show the production and clearance of claimed capital goods, in monthly return /ERI. However there is sufficient evidenc .....

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There is enough corroborative evidence to prove that the inputs received have actually been used in the fabrication of capital goods. In this context it is relevant to observe that the Hon'ble Supreme Court in the case of CCE Jaipur Vs Rajasthan Spinning Mills Ltd. [2010(255)ELT481(SC)applied the "user test" theory (which was evolved in the Jawahar Mills Judgement ((2001)132ELT(S.C.) to determine the eligibility of an items for taking credit as capital goods. The Apex court using t .....

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and steel items used for manufacture of storage tank i.e., components of capital goods cannot be denied. Therefore, in view of discussions in foregoing paras, I find that the appellant is entitled for the credit of duty paid on M.S. Angle, Plates, Sheets, Shape, Channels and Section, etc, used in the manufacturing of capital goods. Similar, view has been taken in the following judgements The Principal Bench of the Hon'ble CESTAT in the case of Shahabad Cooperative Sugar Mills Vs. CCE, Panch .....

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rn used in the manufacture of final product - Credit not deniable Input viz. tor steel, cement, bars and angles used in the manufacture of furnace which is used for the manufacture of final products viz. picture tubes Eligible for credit - Rule 57A of erstwhile Central Excise Rules, 1944 - Rule 3 of Cenvat Credit Rules, 2004". Besides, reliance is placed on the Hon'ble CESTAT's decision/final Order No. 101/2008-sm (BR) dated 05122007, in the case of Dharnpur Sugar Mills Ltd Vs CCE, .....

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Ludhiana Vsn Hero Cycles Ltd., 2007 (207) ELT 663 (P&H) [as referred in the CESTAT's Final Order dated 05.12, 2007 ibid], is relevant, according to which the parts of capital goods used by assessee in fabrication, erection or installation of Cold Rolling Mill were held as eligible capital goods under Rule 57Q of the erstwhile Central Excise Rules, 1944 for availing Cenvat credit The appellant's case is fully covered by the judgements of the Hon'ble High Court & the CESTAT, I .....

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ry was admittedly done and the appellant states that in the present appeal also the facts are similar. This Tribunal may be pleased to allow the appeal with consequential benefits. He further draws my attention to the facts taken notice in the order in original wherein it is admitted in para-4.1.4 that the appellant submitted the documents in support of their claim that the impugned items like plates, sheets, shapes and section, Channel etc. were used in fabrication of capital goods namely, i) C .....

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reply to letter of the Department ; (viii) Details of materials issued for the manufacture of machines and also details of scrap, (ix) Copy of Certificate issued by Chartered Engineer. The appellant had also shown production of Conveyor - 5 Nos., Centi cleaner-2 sets, Vibrating Screen-3 Nos., ETP, Chimney, Boiler Section, and Tank et cetera. More particularly for the items fabricated related to the Cenvat credit in this appeal as taken notice of in para-4.1.6 in the order-in-original denying the .....

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