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M/s. Rasthriya Ispat Nigam Ltd. Versus CCE, C&ST (Appeals) , Visakhapatnam

2016 (11) TMI 930 - CESTAT HYDERABAD

CENVAT credit - crane rails, rails etc. - inputs under Rule 2(k) of CENVAT Credit Rules, 2004 - whether the appellant having availed credit under the category of inputs can content that they are eligible for credit under the category of capital goods? - Held that: - The said issue stands covered by the decisions laid by the Tribunal as well as various High Courts. In CC&CE, Meerut-l vs, Modi Rubber Ltd. [2000 (5) TMI 64 - CEGAT, NEW DELHI] where it was held that the declaration filed by the asse .....

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an Talwar, Advocate for the appellant. Shri P.S. Reddy, Asst. Commissioner(AR) for the respondent. [Order per: Sulekha Beevi, C.S.] The appellants are manufacturers of iron and steel products and are also availing facility of CENVAT credit on inputs and capital goods. On verification of records, it was noticed by the Department that during the period from July 2011 to December 2011 the appellants wrongly availed CENVAT credit of duty amounting to ₹ 22,94,942/- on goods viz. crane rails, ra .....

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before the Tribunal. 2. On behalf of the appellant the learned counsel Shri Karana Talwar submitted that the rails were used within the factory for use in tracks and for replacing damaged rails tracks. He placed reliance on the decisions in CCE, New Delhi Vs. Jindal Steel and Power Ltd. [2015-TlOL-2581-CESTAT-DEL], Jayaswal Neco Ltd. vs. CCE [2015(319) ELT 247 (SC)] and in Tata Steel Ltd. vs. Jamshedpur [2016-TlOL-881-CESTAT-KOL] and submitted that the issue whether credit is available on crane .....

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ncede the fact that rails and railway tracks being structural components / accessories / parts of crane used in the factory without which the crane cannot be functioned, the credit cannot be disallowed. 3. On behalf of the Department the learned AR Shri Nagraj Naik strongly defended the findings in the impugned order. He submitted that decisions quoted by the appellant pertain to the period prior to 01/04/2007 and therefore are not applicable. The learned counsel submitted that the appellants ha .....

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lowed as the goods do not fall within the definition of inputs and therefore disallowance of credit is legal and proper. 4. I have heard the rival submissions made before me. The foremost issue to be considered is whether the appellant having availed credit under the category of inputs can content that they are eligible for credit under the category of capital goods. The said issue stands covered by the decisions laid by the Tribunal as well as various High Courts. In CC&CE, Meerut-l vs, Mod .....

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td. v. CCE, Meerut [1999 (33) RLT 73] wherein the Bench held that the declaration filed by the assessee in terms of Rule 57Q was Sufficient for the purpose of extending credit on glass bottles which were inputs within the meaning of Rule 57A. We also hold similar view in the instant case and sustain the appellant's challenge against the impugned order of the Commissioner (Appeals) denying Modvat credit on the ground that the declaration was not in terms of Rule 574 The appeal is, therefore, .....

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rically held that though the initial claim may be under the category of inputs, the assessee cannot be denied credit of eligible under capital goods. Department does not dispute that the rail, rail material etc. are used to facilitate the transportation of goods using cranes, lifts etc. without which the manufacturing activity cannot be carried out. In such circumstances, I consider that the claim put forward by appellants under the category of capital goods in their reply to show-cause notice y .....

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on railway tracks has also analysed the issue whether railway tracks fall under the category of capital goods. In para 5 of the judgment, the Tribunal has observed as under:- 5. Heard both the sides and examined appeal records. The Revenue appeal is on the short point that the steel structures which are emerging are not capital goods, They are either support structures or platforms, frames, foundations, and parts of civil structure not covered by the category of capital goods, In this regard, w .....

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actory are that Crane Girder and Crane Rail are provided To hold the crane rails in position so that overhead crane is able to move at a required height Crane rails are used for long travel of EOT crane; Crane Columns function to transfer the handled load to the ground when overhead crane is working by combined action of axial force and bending moment. Crane Surge Girder & Crane Auxiliary Girder are used to hold crane girder in position properly while crane is working. In view of their use, .....

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tured as per specific technical requirements and they are technological necessity of the plant for the manufacture of Iron and steel products in respondent's factory and they are essentially required for running the plant and machinery. Since no evidence has been adduced to establish that these goods have not been used in the factory of manufacturer and therefore the respondent has complied with the condition of Rule 2(b) of Cenvat Credit Rules that "such goods should be used in the fac .....

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he manner in which railway track materials have been used by the appellant was explained by the appellant before the Commissioner and veracity thereof was accepted by the Commissioner. Therefore, without any fear of contradiction, we may note the exact process that is involved : "These railway tracks used in transporting hot metal in ladle placed on ladle car from blast fumace to pig casting machine through ladle car where hot metal is poured into pig casting machine for manufacture of pig .....

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