TMI Blog2017 (10) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) TMI 4 - SUPREME COURT OF INDIA], it has been held that M.S. structural which support the plant & machinery should get the benefit of cenvat credit. The disputed credit on various appeals, having been availed before the amendment to rule 2(k) of Cenvat Credit Rules, 2004, w.e.f. 07.07.2009, cannot sustain and will have to be set aside which we hereby do - appeal allowed. Penalties - Held that: - it cannot be disputed that the issue per se was in litigation and the same was settled only by the judgments - penalties set aside. Appeal allowed - decided in favor of appellant. - E/2732/2011 & E/2733/2011 - A/31566 - 31567/2017 - Dated:- 5-9-2017 - Mr. M.V. Ravindran, Member (Judicial) and Mr. Madhu Mohan Damodhar, Member(Technical) Shri S. Jaikumar, B.Venugopal Dwarakanath, Advocates for the Appellant. Sh. K. Raj Kumar, Superintendent/(AR) for the Respondent. ORDER Both these appeals since pertaining to the same appellant and involving identical issue, they are taken up together for common disposal. 2. Facts of the case are that Sree Jayayothi Cements Limited (appellants herein) are manufacturers of cement products falling under chapter 25 of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage tank, equipment for plant machinery, ducting, chimneys etc. such as M.S. Channels/M.S. Angles/M.S. Plates, CTD BARS and cement. In this case also, department took the view that credit taken on such items was irregular since they were not covered either under capital goods or inputs. Accordingly, a show cause notice dated 04.08.2010 was issued to appellants proposing demand of Cenvat Credit amount of ₹ 1,54,61,223/- which was alleged to have been availed irregularly, alongwith interest liability thereon and also imposition of penalty. After due process of adjudication, Commissioner vide impugned order 5/2011 (C.Ex), dated 20.04.2011 confirmed the proposed demand alongwith interest and also imposed penalty of ₹ 15,00,000/- on the appellant under rule 15(1) of Cenvat Credit Rules 2004. Hence, appeal No. E/2732/2011. 4. On 05.09.2017, when both these appeals came up for hearing, on behalf of appellants, Ld. Advocate Shri S. Jai Kumar submitted a chart giving details of the disputed amounts and the periods involved, etc. APPEAL No. E/2732/2011 Financial Year Month Total Credit Availed (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10 June 09 15243352 15243352 50% of the credit for the FY 2009-10 Total Credit availed 35738719 APPEAL NO. E/2733/2011 2010-11 July 09 5768 5768 Aug. 09 0 0 Sept. 09 15120 15120 Oct. 09 30398 30398 Nov. 09 273022 273022 Dec. 09 7911 7911 Jan. 10 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri.-LB)], which is no ton gel relevant or correct law. f) Out of the demand of ₹ 1,54,61,225/- pertaining to the period July 2009 to May 2010 (relating to appeal No. E/2733/2011), major part of demand of ₹ 1,50,82,283/- availed in the month of April 2010 pertains to balance 50% credit on FY 2009-10 (prior to 07.07.2009), availed in FY 2010-11. Ld. Advocate submits that the said credit pertains to the period prior to amendment of rule 2(k) w.e.f. 07.07.2009, credit availed cannot be denied. g) In respect of appeal No. E/2732/2011, the remaining demand amount of ₹ 3,78,942/- is conceded by appellants. 6. On behalf of department, Ld. DR Shri K. Raj Kumar supports the adjudication and submits that adjudicating authority has correctly arrived at the conclusions relying upon the decision of Larger Bench of the Tribunal in the case of Vandana Global Limited. 7. Heard both sides and have gone through the facts. Denial of credit on the impugned items by the adjudicating authority has been done primarily relying on the ratio of Vandana Global Limited (supra) and the Board circular No. 276/110/96-3TRU, dated 02.12.1996. 8. We, however find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled for input credit as jetty was constructed by the contractor, but the jetty is situated within the port area and the appellant is a service provider. According to the appellant, his case is squarely covered by the judgment of the Division Bench of the Andhra Pradesh High Court in Commissioner of Central Excise, Visakhapatnam-II v. Sai Sahmita Storages (P) Limited, 2011 (270) E.L.T. 33 (A.P.) = 2011 (23) S.T.R. 341 (A.P.) wherein in Paragraph 7, it has been clearly held that a plain reading of the definition of Rule 2(k) would demonstrate that all the goods used in relation to manufacture of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for Cenvat credit. It is not in dispute that the appellant is a taxable service provider on port under the category of port services. Therefore, the appellant was entitled for input credit and the decision of the Division Bench of the Andhra Pradesh High Court squarely applies to the facts of the case and answered the question on which the appeal has been admitted. Mr. Y.N. Ravani, learned counsel for the Revenue has placed reliance on the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras in the case of Thiru Arooran Sugars, Thirumandakudi and Dalmia Cements (Bharat) Limited reported at [2017-TIOL-1357-HC-MAD-CX], relying upon their earlier judgments and that of the Honble Apex Court in the case of Saraswati Sugar Mills and Rajasthan Spinning Weaving Mills, it has been held that M.S. structural which support the plant machinery should get the benefit of cenvat credit. The High Court in that case framed following question of law for consideration: (1) Whether the order of the Tribunal is right in law inasmuch as it gives effect to the notification No. 16/09 prior to 7.7.2009, overlooking the fact that the same is made expressly effective only from the aforesaid date? (2) Whether the order of the tribunal placing reliance on Vandana Global to disallow the claim of CENVAT on M.S. Plates, M.S. Angles and M.S. Joint is unsustainable in view of the fact that it has lost its value as a precedent in view of the contrary view expressed by the Supreme Court in Central Excise, Jaipur vs. M/s Rajasthan Spinning Weaving Mills Ltd.? (3) Whether the Tribunal is right in disallowing credit on M.S. Plates, M.S. Joint and M.S. Angles on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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