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2017 (4) TMI 1280

Input Tax Credit - capital goods - M. S. Sheets utilized for construction of silo - UP VAT - case of Revenue is that since the nature of silo is immoveable, and is embedded to Earth, it cannot be included within the definition of ‘capital goods’ - Held that: - storage tank embedded in the earth also forms part of capital goods, if it is otherwise being utilized for manufacture of goods - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II Versus SLR STEELS LTD. [2012 (9) TMI 169 - KARNATAKA HIGH COURT] - the distinction of movable or immovable nature of goods is not contained in the Act, and is otherwise not a relevant consideration, there survives no other ground of challenge to the order of the Tribunal. - credit a .....

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T Act defines capital goods in following words:- 2. . . . . . . . . . (f) capital goods means any plant, machine, machinery, equipment, apparatus, tool, appliance or electrical installation used for manufacture or processing of any goods for sale by the dealer and includes:- (i) components, spare parts and accessories of such plant, machine, machinery, equipment, apparatus, tool, appliance or electrical installation; (ii) moulds and dies; (iii) storage tank; (iv) pollution control equipment; (v) refractory and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) lab equipments, instruments and accessories (viii) machinery, loader, equipment for lifting or moving goods within factory premises; or (ix) generator and boiler, .....

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zed for manufacture or processing of goods sold by dealer. The mere fact that machine, machinery, equipment, apparatus, tools or appliances etc. are generally understood to be movable property, would not mean that plant also has to be necessarily treated as movable property only. There does not appear to be any rational to import the concept of movable or immovable goods while interpreting Section 2 (f) of the Act, when the provision does not say so. The Tribunal has placed reliance upon the decision of Apex Court in Commissioner of Central Excise, Coimbatore and others Vs. Jawahar Mills Ltd. and Others, (2001) 6 SCC 274, which dealt with grant of MODVAT credit to capital goods under the Central Excise Act. The explanation 1 to Rule 57 (q) .....

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l in the impugned order were cases involving sales tax and income tax and, therefore, the Tribunal should not have relied on those decisions is without any substance because the real question is that of the principle laid down by a decision. In view of the liberal language of the provision, Mr. Rohtagi fairly and very rightly did not seriously dispute that if any of the items enumerated in Explanation (1)(a) is used for any purpose mentioned therein for the manufacture of final products, it would satisfy the test of Capital goods . The main contention of Mr. Rohtagi, however, is that the question whether an item falls within the definition of Capital goods would depend upon the user it is put to. The submission is that parts of the items in .....

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s for fresh decision by the Tribunal does not arise. On the facts and circumstances of these cases, therefore, the stand that the items in question are not used for manufacture of final product cannot be accepted for the reasons aforestated. The aforesaid view taken is followed in a subsequent decision in Commissioner of Central Excise, Jaipur Vs. Rajasthan Spinning and Weaving Mills limited, (2010) 12 SCC 186. Attention of the Court is also invited to a judgment of a Division Bench of Karnataka High Court in Commissioner of Central Excise, Bangalore-II Vs. SLR Steels Ltd, 2012 (280) E. L. T. 176. The Court was dealing with a similar provision occurring under Rule 2 (a) of the Cenvat Credit Rules, 2004 in the context of storage tank embedde .....

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