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Vaswani Industries Ltd. Versus CCE, Raipur

2016 (10) TMI 675 - CESTAT NEW DELHI

Denial of CENVAT credit - demand of duty with equal amount of penalties - CTD bars, TMT bars - whether these goods were inputs or capital goods? - whether the appellant is eligibile for cenvat credit of duty paid on CTD bars, TMT bars, etc. used in the manufacture of fabrication of various structures inside their factory? - Held that: - similar issue stands decided in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - .....

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-SM - Final Order No. 54134-54135/2016 - Dated:- 14-10-2016 - Shri B. Ravichandran, Member (Technical) Shri Abhishek Jaju, Advocate for the appellants Shri Dharam Singh, AR for the respondent ORDER Per B. Ravichandran These two appeals are dealing with the same set of facts and dispute and are accordingly taken up together. 2. The appellants are engaged in the manufacture of iron and steel products liable to central excise duty. They were availing cenvat credit of duty paid on inputs and capital .....

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were also imposed on the appellants. On appeal, ld. Commissioner (Appeals) confirmed the original orders and rejected the appeals. 3. Ld. Counsel for the appellants submitted that M.S. Items like bars, angles, etc. ere used by the appellants in the manufacture of structural items, technological structure to support the machines like furnace, chimney, material handling system in their Sponge Iron Plant. They are very much part & parcel of capital machinery without which the manufacturing proc .....

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e decision of the Hon ble Allahabad High Court in the case of Daya Sugar 2015 (316) ELT 394 (Allahabad), decision of the Tribunal in Kisan Sahakari Chini Mills Ltd. 2015 (326) ELT 333 (Tribunal-Delhi) and also on the decision of the Hon ble Supreme Court in the case of Saraswati Sugar Mills - 2011 (270) ELT 465 (SC). 5. Heard both the sides and perused the appeal records. 6. The only issue for decision is regarding appellant s eligibility for cenvat credit of duty paid on CTD bars, TMT bars, etc .....

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ts and Supreme Court. The Tribunal in a recent decision in the case of Singhal Enterprises Ltd. 2016-TIOL-2451-CESTAT-Delhi examined similar set of facts and held that the credit is available. The Tribunal s findings are as below:- 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 pl .....

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arger 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 decision of the Larger Bench was considered by the Hon ble Gujarat High Court in the case of Mundr .....

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s and MS channels used in the fabrication of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgment, the Apex Court has referred to the user test evolved by the Apex Court in the case of CCE, Coimbatore vs. Jawahar Mills Ltd. -2001 (132) ELT 3 (SC), which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the user test to the case .....

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such structurals, will have to be considered as parts of the relevant machines. The definition of Capital Goods includes, components, spares and accessories of such capital goods. Accordingly, 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 . 7. Reg .....

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e case, it is noted that upon usage, these items become part and parcel of the capital machinery helping in the operation of the said machinery. Similarly the Tribunal in Kisan Sahkari Chini Mills Ltd. (supra) examined the credit on the eligibility on the supporting structures for general maintenance and roofing purpose. The facts in the said case are different. The decision of the Hon ble Supreme Court in the case of Saraswati Sugar Mills has been examined by the Hon ble Madras High Court in th .....

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f 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 Revenue submitted that the judgment in the assessee s own case reported in AIT-2011-358-HC (The Commissioner of Central Excise v. M/s. .....

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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 by following the Jawahar Mills s case, this Court held that steel plates and M.S. Channels used in the fabrication of chimney wou .....

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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 by the Tribunal that the machineries were complete and having regard to the meaning of the expression components/ parts , with re .....

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