Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Prism Cement Unit-II Versus CCE & ST, Bhopal

2016 (11) TMI 470 - CESTAT NEW DELHI

Setting-up a new cement plant adjacent to existing plant and machinery - CENVAT credit - steel items used in the set-up activities - whether the denial of CENVAT credit on the ground that these steel items were used in the fabrication of supporting structures and also in creation of immovable assets and as such, is justified? - Held that: - It has been held by the Tribunal consistently that the steel items when they were used in fabrication of capital goods and their accessories inside the manuf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 . - It is not categorically established in the present case that all the steel items are used in creation of immovable assets only. On the contrary, the appellants submitted detailed certificate by a Chartered Engineer. We have perused the same. The said certificate records that upon physical examination, it was certified .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al No. 55228/2013-EX(DB) - Final Order No. 54613/2016 - Dated:- 28-10-2016 - Dr. Satish Chandra, President And Mr. B. Ravichandran, Member (Technical) Shri B. L. Narsimhan, Advocate for the appellant Shri Amresh Jain, DR for the respondent ORDER Per B. Ravichandran The appeal is against order dated 8.10.2012 of Commissioner of Central Excise, Bhopal. By the impugned order, the Commissioner decided three show cause notices covering the period April, 2009 to June, 2011. The appellants are engaged .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tanks (cement silo, clinker silo, Ash Silo etc.); (f) Fabrication of machinery/mechanical equipment s, erection/commissioning ; and (g) Fabrication of ancillary items viz. Hopper, Ducts, Chuts, Chimney, Expansion bellows, Pipe and other connecting/fitting etc. 2. The appellants availed cenvat credit of duty paid on steel items used in the above activities except at Sl.No.(a) above, upto 6.7.2009. Thereafter, they have availed credit of duty paid on steel items with reference to (d), (e) and (f) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot eligible for credit. The Original Authority decided these notices vide impugned order dated 8.10.2012. The Commissioner in the said order disallowed a credit of ₹ 3,14,26,448/- and imposed equal amount of penalty on the appellants. 3. Ld. Counsel for the appellant submitted that the cenvat credit on steel items are admissible as inputs as well as capital goods. The reliance placed in the impugned order upon amendment dated 7.7.2009 to the definition of inputs in Rule 2 (k) of CCR is not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sed for the manufacture of specified capital goods falling under Chapter 82, 84 and 85 of the Central Excise Tariff. Without erection and installation and operation of these capital goods, the manufacture of cement is not possible. It was also submitted that though the steel items by themselves cannot be classified as capital goods, but by their respective usage inside the premises of the appellant, in fabrication of various capital goods and machinery have become accessories or components of su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce was placed on the decision of the Hon ble Karnataka High Court in the case of SLR Steels Ltd. 2012 (280) ELT 176 (Karnataka). 6. Ld. Counsel also submitted that the amendment to the definition of inputs w.e.f. 7.7.2009 has no relevance to the case in hand. Such amendment cannot be applied retrospectively as held by the Hon ble Gujarat High Court in Mudra Ports and Special Economic Zone Ltd. 2015-39-STR-726-Gujarat. The said view has been followed by the Tribunal in a many cases later. 7. Ld. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it. 8. We have heard both the sides and perused the appeal records. 9. It is the case of the appellant that exclusion made w.e.f. 7.7.2009 as per the amended definition under Rule 2(k) of CCR is of no relevance to their case. The exclusion made is to the effect that the inputs used in the manufacture of capital goods elgible for credit shall not include cement, angles, channels, CTD bar, TMT bars and other items used for construction of factory shed, building or laying foundation or making struc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

araswati Sugar Mills V. Comissioner of Central Excise, Delhi - III) in Civil Appeal No.5295 of 2003 dated 02.08.2011. However, we find that this Court has earlier considered the issue in C.M.A.No.1301 of 2005 dated 31.12.2012, wherein, 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 = 2011 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not function. 9. In the decision reported in AIT-2011-358-HC = 2011-TIOL-558-HC-MAD-CX (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 = 2010-TIOL-51-SC-CX (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 Jawah .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gar Mills V. Commissioner of C.Ex., Delhi-III) is concerned, we do not think that the said decision would be of any assistance to the Revenue, 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 = 2010-TIOL-51-SC-CX (Commissioner of Central Excise Jaipur V. Rajasthan Spinning & Weaving Mills Ltd.), the Apex Court held that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Tribunal. 12. Learned standing counsel appearing for the Revenue pointed out that the Tribunal had merely passed a cryptic order by referring to the earlier decisions. We do not think that this would in any manner prejudice the case of the Revenue, given the fact that on the identical set of facts, the assessee's own case was considered by this Court and by following the decision reported in 2010 (255) E.L.T.481 = 2010-TIOL-51-SC-CX (Commissioner of Central Excise Jaipur V. Rajasthan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in Civil Appeal No.5295 of 2003 dated 02.08.2011 is distinguishable on facts. This Court applied the principles laid down in the decision reported in 2010 (255) E.L.T.481 = 2010-TIOL-51-SC-CX (Commissioner of Central Excise Jaipur V. Rajasthan Spinning & Weaving Mills Ltd.) and held in favour of the assessee. 10. Hence, following the principles laid down in the decision reported in 2010 (255) E.L.T.481 = 2010-TIOL-51-SC-CX (Commissioner of Central Excise Jaipur V. Rajasthan Spinning & W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h exclusion is not legally tenable. 11. We note that the eligibility of steel items for cenvat credit has been a subject matter of decision by the Tribunal, Hon ble High Courts and the Hon ble Supreme Court in various cases. It has been held by the Tribunal consistently that the steel items when they were used in fabrication of capital goods and their accessories inside the manufacturing premises are eligible for credit. The principle of user test evolved by the Hon ble Supreme Court in Rajastha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

? The same stands denied by the lower authority. The learned DR has sought disallowance of the same by citing the decision of the Larger Bench in the case of Vandana Global Ltd. (supra) and other judgments. Further, he has brought to our notice and emphasised the amendment carried out in Explanation-II to Rule 2(a) which defines the term input w.e.f. 07.07.2009. It has further been pleaded that the cenvat credit claimed for the period prior to this will be covered within the decision of the Larg .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

orts & Special Economic Zone Ltd. 2015 (04) LCX0197, wherein it was observed that the amendment made on 07.07.2009 cannot be held to be clarificatory and as such would be applicable only prospectively. 15. We find that the controversy can be laid to rest by making a reference to the decision of the Apex Court in the case of CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. -2010 (255) ELT 481(SC), wherein the Hon ble Supreme Court has considered an identical issue of steel plates a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace etc. cannot be suspended in mid air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using suc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

so note that emphasis was made by Revenue on the immovability of the capital goods, the fabrication of which was done using the duty paid items. We note that the capital goods as defined under Rule 2 (a) if CCR, 2004 includes apart from all goods falling under Chapter 82, 84, 85, 90, etc. Pollution Control Equipment, moulds, dies, jigs and fixtures, refractory and refractory materials, tubes and pipes and fittings thereof, storage tank, etc. For instance, it cannot be said that the credit on sto .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version