TMI Blog2017 (8) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the "user test" on the facts in hand, we have no hesitation in holding that the steel plates and M.S. Channels, used in the fabrication of chimney would fall within the ambit of "capital goods" as contemplated in Rule 57Q - credit allowed. Penalty - Held that: - Reliance placed in the decision of Hon’ble Madras High Court in CCE, Salem Vs. Madras Aluminium Co. Ltd. [2016 (12) TMI 1374 - MADRAS HIGH COURT] which also deals with the scope of credit on similar items and also application of the concept of support structure while deciding the dispute, where it was held that there is no willful intent to evade duty and hence the question of invoking the penalty under section 11AC would not arise - penalty set aside. Credit allowed - pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.Consultant appearing on behalf of the respondent assessee submits that the Commissioner(Appeals) has discussed the issue at length and has passed a well-reasoned order and allowed their appeal both on merits as well as on limitation. He further submits that the respondent assessee had undergone expansion of their factory during 2007-08 and established second kiln for manufacturing of sponge iron. It was further contended that Chequered Plate, G.P. Sheet, H.R. Plate, G.P. Coil cut into sheet, H.R. Sheet, Cobble Plate, Welding Electrodes were used for manufacturing of Pollution Control Equipments, Storage Tanks, Material Handling Equipments, and also in the spares, components accessories of these capital goods. 4. Ld.Consultant submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such observation has to be supported by material facts. The same is not available in the present appeal. Further, it is to be noted that whether iron and steel item is to be considered as part or component or accessory of capital goods can be decided by applying user test as decided in Jawahar Mills Ltd. (supra) and elaborated in CCE Vs.Rajasthan Spinning Weaving Mills Ltd. reported in 2010 (255) ELT 481 (S.C.). In fact, the ratio evolved by the Hon ble Supreme Court has been consistently followed by various High Courts as well as this Tribunal while deciding the disputes of similar nature. Admittedly, in large number of cases, the Tribunal as well as various High Courts allowed credit in similar set of facts. A reference can be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery and are eligible for credit as capital goods. The Hon ble Madras High Court in Thuru Arroran Sugar- 2015- TIOL-1734-HC-Mad.CX held that credit on M.S. Plates, angles, channels utilized in construction/erection of plant were eligible for credit. The High Court observed that the principle laid-down by the Hon ble Supreme Court in Rajasthan Spinning and Weaving Mills Ltd. (Supra) is applicable to such situation. 7. We note that the Tribunal has been consistently following the ratio that the steel items when they are used in fabrication of capital goods and their accessories inside the manufacturer premises are eligible for credit by applying user test as evolved by the Hon ble Supreme Court in Rajasthan Spinning and Weaving Mills lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Mundra Ports Special Economic Zone Ltd. 2015 (04) LCXO 197, 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)= 2010-TIOL-51-SC-CX, wherein the Hon ble Supreme Court has considered an identical issue of steel plates 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems and also application of the concept of support structure while deciding the dispute. 8. Ld. A.R. also relied on the decision of Hon ble Supreme Court in the case of Saraswati Sugar Mills Vs. Commr. of C. Ex., Delhi-III [2011 (270) E.L.T. 465 (S.C.) and also the decision of Hon ble Allahabad High Court in the case of Daya Sugar Vs. Commr. of Central Excise, Meerut-I [2015 (316) E.L.T. 394 (All.). The Hon ble Supreme Court in Saraswati Sugar Mills was dealing with provisions of erstwhile Rule 57Q and Notification 65/95-CE which was examined by the Hon ble Madras High Court in the case of India Cements Ltd. [2011-TIOL-558 HC-MAD-CX and decided in favour of the assessee. The observation of the Tribunal in the Lafarge India Pvt. Ltd. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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