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M/s. Aditya Cement Versus CCE, Jaipur-II

2016 (9) TMI 1127 - CESTAT NEW DELHI

Cenvat credit - dumpers and parts thereof - dumpers used for carrying raw materials like limestone etc. from the mining area to the site of the crusher - Held that:- dumpers are material handling equipments used for transportation of limestone from mining area to the crusher which is further used for the manufacture of cement; therefore, the dumpers are to be treated as used in or in relation to the manufacture of final products and thus, qualifies as an “input”. Therefore, in view of the variou .....

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td. is in appeal against the order No.36/2008/CE/JP-II dated 21.07.2008 passed by the Commissioner of Central Excise, Jaipur-II whereunder several credits amounting to ₹ 2,02,68,866/- have been disallowed and a penalty of ₹ 10 lakhs has also been imposed on the appellant. 1.1 The matter concerns with the admissibility of cenvat credit on dumpers and parts thereof, which was treated by the appellant as an input under Rule 2 (k) of Cenvat Credit Rules, 2004. 1.2 The Adjudicating Author .....

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nly submitted as follows:- (i) The appellant uses dumpers to facilitate movement of limestone from the mining area to the crusher, located within the same mining area; limestone is used for manufacturing clinker, which is further used in the manufacture of cement. Appellant availed credit of the duty paid on the dumpers and their parts, as inputs, since these were used in relation to manufacture of dutiable final product. (ii) The dumpers are covered by the definition input under Rule 2(k) of Ce .....

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Ltd.-2003(158) ELT 130(SC). (iii) The dumpers have been used for transportation of limestone from mining area to the crusher, situated within the mining area, which is further used for manufacturing of cement, therefore, dumpers are to be treated as used in or in relation to manufacture of final products and thus qualifies as an input . In the appellant s own case i.e. Aditya Cement Vs. Union of India - 2008 (221) ELT 362 (Raj), the Hon ble Rajasthan High Court observed that railway track materi .....

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s for transportation of limestone to the crushers, one of the raw materials used in manufacture of final product. Thus, transportation of limestone is a process integrally connected with manufacture of cement (final product) and hence, qualifies as an accessory to various capital goods/machineries integrally connected with the manufacture of final product. In this regard, reliance is placed on the following decisions where credit has been allowed on material handling equipments, as capital goods .....

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3(153)ELT A-94 (SC). 3. Revenue has been represented by ld. AR, Shri Yogesh Aggarwal. The ld. AR has reiterated the findings given in the impugned order . 4. We have carefully considered the facts on record and the submissions along with the case laws cited by both the sides. 5. The Revenue has denied the cenvat credit on the dumpers and parts thereof saying that these items are neither inputs nor capital goods for the purpose of availing cenvat credit. However, the appellant argues that the ite .....

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or in relation to the manufacture , which have been used in the definition and meaning of input given in Rule 2 (k). The appellant says that it is not necessary that input has to be part of the final product in all cases, therefore, dumpers have to be treated as an input . 6. The subject goods (s), assessee manufacturer is using for carrying raw materials like limestone etc. from the mining area to the site of the crusher. After examining the facts on record and the decisions of CESTAT, Bangalo .....

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ved in manufacture of final products. 6.1 CESTAT, Delhi in the case of Jindal Steel & Power Ltd. (supra) have held that transfer vehicles used within the factory are eligible for cenvat credit. CESTAT in this case in respect of such vehicles observes as under:- 8. They are not transfer vehicles or trucks for common public transport of goods. As admitted in the proceedings, they are specially designed for industrial purpose and the sic operate within narrow scope of factory premises. In the c .....

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could not be transferred from oven to furnace, accordingly, eligible for credit. The Tribunal relied on Larger Bench decision in the case of Banco Products (India) Ltd. [2009 (235) ELT 636 (Tribunal-LB) = 2009-TIOL-421-CESTAT-AHM-LB. The Larger Bench of this Tribunal held that machines used for delivery of raw material in time or increasing the effective working of the same and even removal of finished goods contribute to manufacture of finished goods. 6.2 Hon ble Supreme Court in the case of C .....

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for transport within the factory /mine premises are entitled to Modvat credit under Rule 57Q of erstwhile Central Excise Rules, 1944. Hon ble Rajasthan High Court in this case , inter alia, observes as under:- 19. We are of the opinion that the principle emerging from decisions of the Hon ble Supreme Court and of this Court applies to the present case also. In the light of the aforesaid principle, if we take into account the use of iron and steel ingot as parts and components of its machinery us .....

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