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2016 (10) TMI 905 - CESTAT ALLAHABAD

2016 (10) TMI 905 - CESTAT ALLAHABAD - TMI - CENVAT credit - items falling under chapter 76, 83,68, 69 of CETA - capital goods in terms of Sub-Clauses of Rule 2(a)(A) of CCR, 2004 or inputs - components/spares/accessories of capital goods - packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat loss - Held that: - the definition of inputs in Rule 2(k) of CCR means and includes all goods used in the factory by the manufacturer o .....

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rectly and whether contained in final product or not and includes items like lubricating oils, grease, cutting oils etc., in relation to manufacture of final product or for any other purpose within factory of production. - I find that most of the items in question have been indisputably utilized in the factory of production of excisable goods and without the use of which the appellant could not have manufactured excisable goods - CENVAT credit allowed - appeal allowed - decided in favor of a .....

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ulation of boiler, SS Hose assembling, non-metallic jointing sheet, white dry asbestos packing, graphited asbestos packing, superlight packing & jointing, insulation material for steam pipes, MS Fab base for planetary gear box, single metal expansion, Hysil thermal insulation articles, ASB GL packing, plumber block, M.S. grating, Rails, metallic jointing sheet, RBS-LP, etc., falling under chapter 76, 83,68, 69 of CETA have been rightly availed or not during the period of 2005-06 to 2009-10. .....

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R, 2004. As these items do not appear to be covered under the description of components/spares/accessories of capital goods and as such are not covered under Sub-Clause No.(iii) of Rule 2(a)(A) of CCR, 2004. The SCN was adjudicated on contest, and the proposed demand confirmed recording of finding that the appellants have been used in the earth and immovable property. The packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat l .....

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dicating authority, observing that the impugned goods were used in the plant and machineries which are immovable and attached to earth. As regards MS Grating, the appellant has submitted that it was used for fabrication of platforms and ladders to monitor functioning of boiling house: Further, observed that platforms are not capital goods in terms of Rule 2(a) of CCR, as these structures are immovable goods embedded to earth. Further reliance was placed on the Ruling of Larger Bench of this Trib .....

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lowed along with the proposal for penalty. The SCN was adjudicated on contest and proposed demand was confirmed along with equal amount of penalty imposed under Rule 14 of CCR. Observing that the appellant have claimed that said items have been used in fabrication of Pan and Juice Heater. As the appellant has themselves used word 'fabrication' instead of 'manufacture' which have definite meaning under Central Excise Act. Further observed that the appellant have stated that partia .....

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is an admitted fact that the items in question have been utilized either in repair or maintenance of the existing capital assets, or the items have been utilized as insulation and jointing materials, or some new machineries etc. have been fabricated or manufactured without which the appellant could not have manufactured the excisable outputs being Sugar and Molasses etc. The learned Counsel further states that the issue is no longer res Integra and the same have been decided in their favour by a .....

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Hon'ble High Court in the case of Hindustan Zinc Ltd, Vs. Union of India, Ambuja Cements Eastern Ltda Vs. CCE, Raipur and CCE, Banglore VSE Alfred Herbert (India) Ltd. It was Further held that moreover, maintenance and repair is an activity without which manufacturing activity would not be commercially feasible even though theoretically it may be possible to carry out manufacturing activity without repair of plant and machinery. In the Ruling of Apex Court, in the case of J.K. Cotton Spg. & .....

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to be treated as used in the manufacture. It was further observed that the definition of 'input' in Rule 2(k) of CCR, 2004 is much wider. Further reliance was placed on the Ruling of Hon'ble Calcutta High Court in the case of Singh Alloys & Steel Ltd. Vs. Assistant Collector of Central Excise reported at 1993 (66) E.L.T. 594, wherein it have been held that the definition of 'input' does not depend on what ought to be used but what is commercially expedient to use and the .....

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cture and hence any item used for repair and maintenance would be eligible for Cenvat Credit. It was also observed that under the admitted facts that the assessee have fabricated or manufactured components of Sugar mill machinery the steel items etc. were used hence one thing is accepted that steel items have been used for fabrication of various items of sugar mill machinery as mentioned in the Order-in-Original or in the repair and maintenance, these steel items etc, would have to be treated as .....

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