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M/s Lafarge India Pvt. Limited Versus CCE, Raipur

2016 (10) TMI 615 - CESTAT NEW DELHI

Denial of CENVAT credit - imposition of penalty - manufacture of cement liable to Central Excise Duty - duty paid on various steel items like TMT bars, Coil, Steel tubes and pipes, modified armor plate, rectangular bar, PCC Chequred plate, chain conveyor etc. falling under Chapter 72 and 73 of the Central Excise Tariff Act, 1985 - eligibility of iron steel structure items for cenvat credit either as an input or as a capital goods - Held that: - the decision in the case of Commissioner vs. Rajast .....

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r ( Technical ) Sh. P. K. Sahu and Sh. Prashant Shukla, Advocates for the appellant Ms. Neha Garg, AR for the Respondent ORDER Per B. Ravichandran The appeal is against order dated 24.03.2009 of Commissioner of Central Excise, Raipur. The issue involved in the present appeal is the eligibility of appellant for availing cenvat credit of duty paid on various steel items like TMT bars, Coil, Steel tubes and pipes, modified armor plate, rectangular bar, PCC Chequred plate, chain conveyor etc. fallin .....

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of penalty. 2. We have heard both the sides and perused the appeal records including written submissions and case laws relied upon by both the sides. The disputed items on which credit has been denied were all listed individually and their usage has been also shown in detail. The nature of items and their usage is not in dispute. The steel structure (including pipes and accessories), rectangular bar, expansion joint, non standard part and various specific items like chain, conveyor chain, rolle .....

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f the appellant unit. The emerging items after usage of these steel items were raw mill house, coal mill house, preheater tower, rotary kiln, clinker cooler etc. The original authority held that various steel items on which cenvat credit has been availed were used for construction of foundation and super structure of huge plant and machinery cannot be considered as excisable goods as such structure are attached to earth and hence not marketable. 3. We have examined the impugned order carefully. .....

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of capital goods is introduced by the original authority in considering the eligibility of item for cenvat credit either as an input or as a capital goods. We find no such stipulation in the Cenvat Credit Rules regarding excisability of plant and machinery to be established before credit can be allowed on the input used in the manufacture of capital goods by the manufacturer. Various case laws and Board Circulars have been quoted by the original authority to examine the scope of excisability of .....

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he manufacture of capital goods, they made a plea that such items used in the repair and maintenance of capital goods can be allowed credit. 5. The appellant relied on various decided cases in support of their claim by making the following submission in this regard: (i) In Commissioner vs. Rajasthan Spinning & Weaving Mills Ltd. 2010 (255) ELT 481 (SC), the Hon ble Supreme Court has held that steel plates and MS channels used in the fabrication of chimney would fall within the ambit of capit .....

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late, angels, channels etc. used for connecting/ fitting fans, casing, ducting in kilns for the manufacture of clinker are eligible for cenvat credit. The Hon ble Karnataka High Court in CCE vs. Mysore ICL Sugars Ltd. 2011 (271) ELT 360 (Kar.) has held that cenvat credit on the raw materials used in manufacture of tank which is an immovable property, cannot be denied. In CCE vs. JSW Ispat Steel Ltd. 2015 (327) ELT 549 (Tri.) this Hon ble Tribunal has allowed the cenvat credit on the goods used i .....

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o pollution control equipment or part thereof and eligible for cenvat credit. (v) The definition of input as given in the Rule 2(k) of Cenvat Credit Rules, 2004 has been amended with effect from 07.07.2009 to exclude cement 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 structure for support of capital goods from the meaning of input . This amendment .....

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redit on steel items used in construction of structures during the notice period which is prior to 07.07.2009. (Mundra Port & Special Economic Zone Ltd 2015 (39( STR 726 (Guj.) 6. We find that apart from the various other case laws relied upon by the appellant as above, the decisions of Hon ble Madras High Court in India Cements Limited 2012 (285) ELT 341 (Mad.), 2014 (310) ELT 636 (Mad.) and 2014 (305) ELT 558 (Mad.) all on the same set of facts, though with reference to erstwhile Rule 57Q .....

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so capital goods and the fact that they are embedded to earth is no reason for denying credit/ credit on input used. The Hon ble Punjab & Haryana High Court in CCE, Jullandhar vs. Pioneer Agro Extracts Ltd. 2008 (230) ELT 597 (P&H) held that channels and angles, joint of iron steel used for installation of batch vessel or essential plant and machinery and are eligible for credit as capital goods. The Hon ble Madras High Court in Thiru Arooran Sugar - 2015-TIOL-1734-HC-Mad.CX held that cr .....

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y applying user test as evolved by the Hon ble Supreme Court in Rajasthan Spinning and Weaving Mills Ltd. (supra). A reference can be made to latest decision of the Tribunal in Singhal Enterprises Pvt. Ltd. vs. CC&CE, Raipur vide final order No. 53013/2016 dated 12.08.2016. The findings of the Tribunal are as under: 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 .....

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at credit claimed for the period prior to this will be covered within the decision of the Larger Bench in the case of Vandana Global Ltd. (supra). 14. The Larger Bench decision in Vandana Global Ltd. s case (supra) laid down that 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 decisio .....

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