TMI Blog2008 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... [Order per].- Cenvat Credit of Rs. 2,42,163/- availed by the appellants herein who are engaged in the manufacture of Sponge Iron, on cement, M.S.Bar, CTD Bar and Beams used in construction of foundation for Kiln, cooler and chimney (capital goods) and Helmets for safety of their employees, during April 2004 to March, 2005 has been disallowed on the ground that the items are not capital goods in terms of definition thereof in Rule 2(a) of the Cenvat Credit Rules,2004 and penalty of Rs. 75,000/- has also been imposed upon them. 2. The appellants' contention is that steel and cement on which credit had been availed were an integral part of kiln, cooler and chimney used in the appellants' factory premises for manufacturing HR coils, pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were neither inputs nor capital goods. He also relied on the Tribunal's decision in Madras Cement Ltd. vs. CCE [2006 (202) ELT 106] to support his submission. 4. I have heard both sides. 5. I find that it is not disputed that without the supporting structure which forms the foundation of the capital goods viz. kiln, cooler and chimney , the said capital goods could not have been installed or put to any use in the manufacturing operations. This is the view held by the Hon'ble Rajasthan High Court in the case of Aditya Cement vs. UOI [2000 (221)E.L.T. 362 (Raj)] wherein the High Court reversed the decision of the Tribunal reported in 2003(159)E.L.T. 1005, rejecting the assessee's claim for credit on steel item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants have not claimed capital goods credit in respect of the steel material, about 95% of the total steel material purchased by them, which is used for the purpose of building construction; that it is only in respect of balance 5% of the steel materials where the same has been used as supporting structures for the various machineries where the same has been used as supporting structures for the various machineries. Reliance has been placed on the decision in the case of Global Sugar Ltd. v. C.E., Kanpur 2000(119) ELT 611(T)". 6. The Tribunal's decision in Ispat Industries Ltd supra has considered almost all the earlier decisions on the subject and concluded that as long as steel and cement are clearly linked with the machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decision of the Tribunal in Madras Cements relied upon by the Revenue has been passed without noticing the earlier decisions of the Tribunal on eligibility to credit on the items in dispute and is therefore, per incuriam and cannot be treated as a binding precedent. In any event, the decision of the Rajasthan High Court in Aditya Cement supra which is directly on the issue in dispute in the present case will prevail over the Hindustan Zinc Ltd as well as the Madras Cements Ltd. decisions. 8. In the light of the Aditya Cement decision, I accept the submission of the appellants that the goods in question qualify for Cenvat credit as capital goods as they are parts and components essential to hold the machine and hence p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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