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2016 (9) TMI 1097 - CESTAT NEW DELHI

2016 (9) TMI 1097 - CESTAT NEW DELHI - TMI - Cenvat credit - availed on 836.99 MT of steels used for fabrication of misc. structures - Rules 12 and 13 of erstwhile Cenvat Credit Rules, 2001/2002 read with Section 11 A of the Central Excise Act, 1944 - three main categories of items viz., M.S. Beams, Angles, Plates and Channels used to support the various ducts and cyclones in the appellant's factory, iron steel items used for fabricating, attending platforms, which are generally erected around a .....

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ligible on any of them. We find that the denial of credit by the lower authorities is on the ground that the items are not used in the manufacture of capital goods as none of the items, as described above, arising after fabrication, can be considered as accessories of the capital goods. Further, they become immovable upon fabrication. We find both these arguments as un-sustainable. Much emphasis has been made on the requirement and necessity of emergence of excisable items after fabrication usin .....

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Courtís observation in Rajasthan Spg. & Wvg. Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA]. The Honíble Apex Court allowed the credit on steel plates and M.S. channels used in the fabrication of chimney applying user test . In other words, the usage of a particular item in the appellant s premises will determine the credit eligibility rather than its classification alone. Hence, we find no merit in the impugned order and accordingly set aside the same. - Decided in favour of appellant - .....

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stwhile Cenvat Credit Rules, 2001/2002 read with Section 11 A of the Central Excise Act, 1944, and imposition of equivalent penalties under Rules 12 and 13 of Cenvat Credit Rules (CCR) 2001/2002. 3. This matter had come before this Tribunal earlier vide Final Order dated 29.06.2007. The matter was then remanded back to the Original Authority to decide afresh on merits. Thereafter, the Original Authority viz. the Asstt. Commissioner of Central Excise, Division, Ratlam vide de novo Order-in-Origin .....

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ainst the Order-in-Appeal No.IND-I/57/2009 dated 19.03.2009 of the Commissioner (Appeals). The period involved here is from Jan. 2002 to May, 2002. 4. The appellant has been represented by ld. Advocate, Shri B.L. Narsimhan, who has, inter alia, pleaded, at the strength of written note, as follows- i) the subject items such as ducts are in the nature of pipes and chutes and hoppers are in the nature of material handling equipments and hence, covered as capital goods under Rule 2(b) of Cenvat Cred .....

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inputs shall be treated as used in the manufacture of capital goods. For capital goods, they should be used in the factory of manufacture of final products for being entitled to credit. ii) The cenvat credit is available on these items as inputs as they were used in the manufacture of capital goods i.e. parts of specified capital goods which were further used in the factory. Alternatively, credit will be admissible as capital goods under the category of components, spares and accessories of spe .....

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on steel inputs used in the machinery of parts or components or accessories of specified capital goods has been availed as per law and the same is sustainable. vi) The steel items have been used as part of setting up of plant and without use of such steel, plant cannot be set up and they are required to be considered as used in or in relation to manufacture of dutiable final products and thus, eligible to credit. 4.1 Ld. Advocate has further submitted that : i) Cenvat credit would be admissible .....

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ilized wrongly in the present case. 5. The Revenue has been represented by ld. DR, Shri Yogesh Agarwal, who reiterated the findings of impugned order. He additionally has, inter alia, submitted as follows:- i) The term capital goods consist of two words capital and goods. Cenvat credit is available on inputs defined in Rule 2 (k), input services defined in Rule 2(I), and capital goods defined in Rule 2(a) of CCR. ii) As per the Hon ble Supreme Court s decision in the case of Union of India Vs. D .....

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Tata Robbins Fraser Ltd. 1999 (110) ELT 755 (T-Delhi) iii) Capital goods must be first covered as excisable goods and thereafter, only credit can be taken of the duty paid on inputs of such excisable goods. iv) On inputs on which cenvat credit is being claimed must be used for manufacture of capital goods and not for structures like foundations or supporting structures or permanently embedded plant, which are not the goods . 5.1 Further, ld. AR, Shri Yogesh Agarwal appearing for the Revenue subm .....

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nd their chassis including dumpers and tippers. (from 1.4.2012). 5.2 In support, Ld. AR also cited the decision of the Hon ble Allahabad High Court in the case of Daya Sagar Vs. CCE 2015 (316) ELT 394 (HC). 6. We have carefully considered all the facts on record and submissions of both the sides along with the case laws cited. 7. We find that this is a second round of litigation before us. In the remand order dated 29.06.2007, the Tribunal directed the Original Authority to find out factual posi .....

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transportation of materials in process. The ducts and cyclones are integrally connected to capital goods used in the manufacture of final products. Second, the iron steel items were also used for fabricating, attending platforms, which are generally erected around a machinery. This helps in regular monitoring, repair and check-up of these capital goods. These attending platforms are attached to the machinery and are a part and parcel of overall configuration of manufacturing machinery. The thir .....

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S. items, on which credits have been taken are falling under Chapter 72, which is not covered under the category of capital goods . The second main objection is that these items were used for fabricating the structures, which become immovable upon fixing and hence, results in a non-excisable item. Hence, the credit is not eligible on any of them. We find that the denial of credit by the lower authorities is on the ground that the items are not used in the manufacture of capital goods as none of .....

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ttedly, various capital goods and machinery for the plants are bought individually, wherever they are used they are identifiable machinery under due classification and on payment of duty. However, to have a manufacturing facility in such a complex operation, all these machineries and their accessories are to be integrated properly. Hence, various other items are fabricated in the appellant s unit also. Now, we are dealing with some such fabrication, which are done inside the appellant s unit. We .....

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In other words, it is of common knowledge that most of the capital goods and their accessories were put in place of their operation by various degrees of fixation and embedding. It cannot be alleged that such fixation and embedding will make all the capital goods and machineries as immovable property. The matter has to be examined on case to case basis and no sweeping statement can be made on such facts. 7.3.1 The reliance placed by the lower authorities on Daya Sagar (supra) is not proper. In t .....

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ut these structurals, the machinery could not be erected and would not function. 10. In the case of Commissioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd., reported in 2010 (255) E.L.T. 481, relied on by the learned counsel appearing for the assessee, the Apex Court, while dealing with the issue in question, in Paragraph Nos. 7 and 8, held as follows : 7. In the present case, it is seen that the items in question were used in the erection of various machineries suc .....

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, 2004. The allegation in the above show cause notice that the Chapter Heading of these items were not covered under Rule 2(a) of the Rules, 2004, is not sustainable, in respect of pollution control equipments because the rule does not specify the tariff headings under which pollution control equipment should be falling. The appellant established that these items were used for erection of capital goods namely Dry Process Cement Manufacturing Plant, which falls under Chapter 84, as mentioned in S .....

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considered view, the present case is covered by the decision of the Hon ble Madras High Court in appellant s own case as referred above. We have also noticed that the Hon ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills Ltd. (supra) as relied upon the Hon ble High Court in the appellant s own case, allowed Modvat credit on MS channels, steel plants etc. as capital goods used for erection of chimney for diesel generating set. The findings of the Commissioner that these are s .....

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by the learned Standing Counsel appearing for the Revenue is concerned, we find that this Court had earlier considered the case of the assessee in two similar cases of the previous assessment years in C.M.A. No. 1301 of 2005, dated 31-12-2012, where a reference was made to an order passed earlier in respect of the very same assessee. While dismissing the appeal filed by the Revenue, the Division Bench of this Court held as follows : 8. Even though learned standing counsel appearing for the Reven .....

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ut these structurals, the machinery could not be erected and would not function. 9. In the decision reported in AIT-2011-358-HC (The Commissioner of Central Excise v. M/s. India Cements Limited), pointing out to Rule 57Q and the interpretation placed by the Apex Court in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.) and in particular Paragraph Nos. 12 and 13, wherein the Apex Court had applied the user test .....

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ommissioner of C.Ex., Delhi-III) is concerned, we do not think that the said decision would be of any assistance to the Revenue, considering the factual finding by the Tribunal therein in the decided case that the machineries purchased by the assessee were machineries themselves. Thus, after referring to the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.), the Apex Court held that in view of the findings rendered .....

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ppearing for the Revenue pointed out that the Tribunal had merely passed a cryptic order by referring to the earlier decisions. We do not think that this would in any manner prejudice the case of the Revenue, given the fact that on the identical set of facts, the assessee s own case was considered by this Court and by following the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.), the Revenue s appeal was also reje .....

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