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2016 (10) TMI 649 - CESTAT CHANDIGARH

2016 (10) TMI 649 - CESTAT CHANDIGARH - TMI - CENVAT credit - capital goods - manufacturing of health products - installation of bulk milk coolers (BMC) and DG sets at milk collection centres to store the milk collected at a specific temperature - whether denial of CENVAT credit justified on the ground that BMC and DG sets installed at milk collection centers have not been used in the factory of the appellant? - Held that: - bulk milk coolers and DG sets have been installed by the appellant in t .....

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t : Shri Atul Handa, Ld. A.R ORDER Per : Ashok Jindal The appellant is in appeal against the impugned order denying the credit on capital goods on the allegation that the capital goods installed in various villages around the factory. 2. The brief facts of the case are that the appellants are engaged in the manufacture of health products i.e. Horlicks, Boost, etc. The appellant is procuring the milk, a predominant raw material for manufacture of health products from the villages nearby its facto .....

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the capital goods have not been used in the factory of the appellant. Both the authorities below denied the credit on capital goods confirming the demand alongwth interest and equivalent amount of penalties were also imposed. Aggrieved with the said order, the appellant is before me. 3. Learned Counsel for the appellant submits that the appellant is entitled to avail credit on BMC and DG sets installed milk collection centers. As per definition of Rule 2 (a) of Cenvat Credit Rules, 2004, the onl .....

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between the appellant and the local milk supplier, the ownership of the milk transferred to the appellant at milk collection centers itself. Milk collection centers form integral part of the unit, therefore, they entitled to avail credit in the light of the decision of Apex Court in the case of Vikram cements-2006 (197) ELT 145 (SC) and Hindalco Indalco Industries Ltd.-2014 (313) ELT (Tri.-Del.), Biral Corporation Ltd.-2005 (186) ELT 266 (SC) and this Tribunal in the case of JSW Steels Ltd.- 20 .....

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tention of the learned Counsel and submits that the BMC installed at the milk collection centers in various villages around the factory. Some of these milk collection centers are as far as 30 kilometer from the factory. To avail the credit two conditions are required to be satisfied : (a) the goods must fall within the definition of capital goods and (b) the capital goods must be used in the factory to manufacture final products but the definition include any equipment or appliance used in offic .....

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cases of South Eastern Coalfields ,Vikram Cement and JSW are not relevant. Further he relied on the decision Bharat Oman Refineries-2014 (309) ELT 549 (Tri.-Del.) and also in the case of Southern Iron & Steel Co.-2000 (121) 164 (Tri), Vikash Industrial Gases-2000 (118) ELT 257. Therefore, he submits that the credit is not available to the appellant. 6. Heard both sides and considered the submissions. 7. On careful consideration of the submissions made by both sides, I find that the issues em .....

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ase of Virkram Cement. In the case of Bharat Oman refinery, this Tribunal has not considered the decision of Vikram Cement and South Eastern Coalfields further JSW (supra). I have seen in the case of Vikram Cement, the Apex Court observed as under: 5. As regards the Modvat/Cenvat credit on capital goods, if the mines are captive mines so that they constitute one integrated unit together with the concerned cement factory, Modvat/Cenvat credit on capital goods will be available to the assessee. On .....

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Industrial Gases has observed as under: 6.3 We are of the view that the ratio of the above-mentioned judgments of the Apex Court is squarely applicable to the facts of this case, as the Renusagar Power Plant, which is a captive power plant of the appellant company, together with the cement factory of the appellant company constitute one integrated unit and it is not disputed that except of small quantity of electricity generated being used in the Renusagar township, the remaining quantity is us .....

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t of Hindalco (the appellant) and therefore the Renusagar Power Plant has to be treated as captive power plant of Hindalco. 7. However, since, admittedly, some quantity of electricity generated is used in the township and is not used in the factory of the appellant company for manufacture of excisable goods, to that extent, the input duty credit would not be admissible in view of judgment of the Apex Court in the case of CCE v. Solaris Chemtech Ltd. [2007 (214) E.L.T. 481 (S.C.)]. However, for d .....

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nes to the factory premises and is not a material handling equipment within the factory premises. It is not disputed before us that the crushed lime stone is brought from the mines to the factory premises where it is deposited utilising the ropeway as a means of transportation Wherein the Apex Court has observed as under: 5. In the instant case the same question arises for consideration and the facts are almost Identical. We cannot permit the Revenue to take a different stand in this case. The e .....

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