TMI Blog2017 (3) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... in the vicinity - Held that: - No doubt, the railway yard was definitely used for handling coal which is essential to the manufacturing process, nonetheless as, the same is outside the factory premises, it cannot come within the ambit of eligible "capital goods" for the purpose of Rule 2 (1A) of Cenvat Credit Rules, 2004. The cenvat credit in respect of the railway siding and rest rooms/other fittings in the railway yard outside the factory cannot be availed since not falling within the ambit of the definition of "capital goods" - appeal dismissed - decided against appellant. - E/41003/2014 - Final Order No. 42239/2016 - Dated:- 18-11-2016 - Shri Madhu Mohan Damodhar, Member (Technical) Appearance: Shri Rupesh Sharma, Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing activities and the railway line has been put up for carrying coal which in turn are used for generation of electricity, which in turn used for manufacture of final product He placed reliance on the ratio of Supreme Court judgement in the case of Jayaswal Neco Ltd Vs CCE Raipur - 2015 (319) ELT 247 (SC) which has held that railway track installed within the plant was handling system for raw material and processed material and hence capital goods credit could not be denied. Ld. Advocate submits that ratio of this judgement also applies to the facts and circumstances of their case even though railway line in their case was outside the factory. He submitted that similar issue has been dealt by Hon'ble Rajasthan High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heard both sides. 6. It is seen that there is Private Siding Agreement between Southern Railway and the appellant. Railway land required for laying sliding has been licenced to the appellant. One of the conditionalities is that the land outside the railway boundary was also to be acquired by appellant. Appellant is required to pay licence fee @ 6% per annum at the market value of the land or at such rate as fixed from time to time. It is also laid down in the agreement in clause 15 (a) that no traffic inward or outward other than those of the appellant shall at any time be sent over the siding. This indicates that siding of the railway yard is to be used exclusively for the appellant. It is not disputed that continuous supply of coal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer. I do not find any other provision or relaxation for availment of credit on capital goods if used outside the factory of the manufacturer. No doubt, the railway yard was definitely used for handling coal which is essential to the manufacturing process, nonetheless as, the same is outside the factory premises, it cannot come within the ambit of eligible capital goods for the purpose of Rule 2 (1A) of Cenvat Credit Rules, 2004. 8. In the landmark judgement of the Hon'ble Apex Court in Vikram Cement Vs CCE Indore - 2006 (197) ELT 145 (SC), in respect of, capital goods used in captive mines, it was laid down as follows:- 5. As regards the Modvat/Cenvat credit on capital goods, if the mines are captive mines so that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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