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M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur

2016 (9) TMI 682 - CESTAT NEW DELHI

Cenvat Credit on structural steel items - Held that:- applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit. - Decided in favor of assessee. - Excise Appeal No. 58596/2013-EX[DB] - Final Order No. 53013/2016 - Dated:- 12-8-2016 - Mr. Justice (Dr.) Sat .....

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duty levied on them. The inputs on which credit was taken were mostly structural items and welding electrodes. Structural steel items such as HR Plates, M.S. Channels, M.S. Beam, TMT Bar, CTD Bar etc and welding electrodes were used by them in the manufacture of capital goods, and also components and accessories of capital goods which were further used in the manufacture of final product. Revenue sought to disallow the CENVAT Credit taken on these items and vide the impugned order, the CENVAT C .....

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ts as well as on time bar. On merits, their arguments are mainly as follows:- i). Cenvat Credit on structural steel items used by them classified to be considered as capital goods inasmuch as their components and accessories of capital goods for which credit will be available in respect of their classification. Several High Courts and Tribunal Benches have laid down that credit could be available even if components manufactured and erected have become integral part of immovable structure. ii). I .....

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nes cannot function unless they are securely attached to the ground with structural support. And, hence, the structural support is an inherent component of the machines. Eligibility of CENVAT Credit on welding electrodes has been settled in their favour in several judicial pronouncements. 3. On the issue of time bar, their main contentions were as follows:- i). They have regularly confirmed in their ER-1 Returns that they are availing CENVAT Credit on structural steel and welding electrodes. Hen .....

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rtain capital goods manufactured by them out of structural steel items, mainly chute, hopper and other structures which were claimed to be parts of material handling conveyor systems. The issue was settled in their favour by the Commissioner (Appeals) ordering such goods for classification under 8431. Since the practice has continued on the part of the appellant, they claimed that the such demand is hit by time bar. 4. We have heard, Shri H.V. Girinikar, the Ld. Counsel for the appellant and Shr .....

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Central Excise, Raipur-I, 2010 (253) ELT 440 (Tri-LB). 6. The learned AR has reiterated the view taken by the adjudicating authority. They have further placed reliance on the following case laws : (a) Vandana Global Ltd. Vs CCE, Raipur, 2010 (253) ELT 440 (Tri.-LB); (b) Daya Sugar vs Commissioner of Central Excise, Meerut-I, 2015 (316) ELT 394 (All.); (c) Dwarikesh Sugar Industries Ltd. Vs Commissioner of Central Excise, Meerut, 2016 (334) ELT 58 (All.); (d) Tower Vision India Pvt. Ltd. Vs Comm .....

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) Balmer Lawrie & Co. Ltd. Vs Commissioner of Central Excise, Belapur, 2014 (301) ELT 573 (Tri.-Mumbai); (j) Sunrise Industrials vs Commissioner of Central Excise, Bangalore, 2014 (311) ELT 737 (Tri.-Bangalore). 7. The present dispute revolves around the question whether CENVAT Credit is allowable on various structural items such as M.S. angles, M.S. Channels, CTD Bar, TMT Bar, etc and welding electrodes which were used for making structures for support of capital goods. To consider this que .....

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not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or stream used in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing an .....

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ated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making or structures for support of capital goods]; Further, the term Capital Goods has been defined in Rule 2(a) of the Cenvat Credit Rules, 2004, which reads as under : (a) Capital Goods means :- (A) the following goods, namely :- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90 [heading 6805, grinding wheels and the like, and parts thereof falling under heading 6 .....

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proceed to decide the appeal on the two following issues : (i) Entitlement of Cenvat Credit on welding electrodes; and (ii) Availability of Cenvat Credit on various structural items, such as, MS Angles, Channels, CTD bar, TMT bar etc. which have been used in support structure of the capital goods. 10. As regards the credit of duty on welding electrodes, the appellants have cited the following judicial pronouncements to support the contention that the said credit will be allowable : (i) 2006 (194 .....

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er Rule 2(a) of the Cenvat Credit Rules, 2004 and have come to the conclusion that the credit will not be allowable under this Rule. However, we find that the credit of duty paid on Welding Electrodes has been held allowable by several decisions of this Tribunal and hence the issue is no more res integra. We also find that several High Courts have also allowed such credit considering the same as allowable within the definition of Input under the Cenvat Credit rules. One such reference can be mad .....

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the appellants are entitled to the credit on welding electrodes considering them as Inputs . 13. Now we turn to the question, whether credit is admissible on various structural steel items, such as, MS Angles, Sections, Channels, TMT Bar etc., which have been used by the appellants in the fabrication of support structures on which various capital goods are placed? The same stands denied by the lower authority. The learned DR has sought disallowance of the same by citing the decision of the Larg .....

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hat even if the iron and articles were used as supporting structurals, they would not be eligible for the credit. Considering the amendment made w.e.f. 07.07.2009 as a clarification amendment and hence to be considered retrospectively. However, we find that the said decision of the Larger Bench was considered by the Honble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd., 2015 (04) LCX0197, wherein ti was observed that the amendment made on 07.07.2009 cannot be he .....

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