TMI Blog2018 (7) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... e machinery which are used in the manufacturing of final product - there is no reason to deny the CENVAT credit on these items - appeal allowed - decided in favor of appellant. - Ex.Appeal No.237/12 - FO/76348/2018 - Dated:- 16-3-2018 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER AND SHRI C. J. MATHEW, TECHNICAL MEMBER Shri Kartik Kurmi Rajesh Sharma, both Advocates for the appellant (s) Shri D. Halder, Asstt. Commr. (A.R.) for the Revenue ORDER Per Coram : This appeal is filed by the Appeal against the impugned Order-in-Original No.CCE/BBSR II/NO.47/COMMISSIONER/2011 dated 14.12.2011 passed by Commr. of Customs, Central Excise S.Tax, BBSR II. 2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of sponge iron and M.S. Billet classifiable under chapter 72 of the first schedule to Central Excise Tariff Act, 1985. A show cause notice dated 05.10.2009 was issued proposing to deny the cenvat credit on various articles of iron and steel namely MS Coils, MS Channels, GP Sheets, DHR Plates, etc. during the period from Sep 2008 to June 2009. By the impugned order, the ld. Commissioner disallowed the cenvat credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Cenvat credit and the Revenue s appeal was therefore dismissed. In this context, the relevant portion of the Tribunal s decision in the case of Singhal Enterprises Pvt. Ltd. (supra) may be referred: 12 . We have gone through the judgment of the Hon ble High Court of Allahabad cited by the Revenue. We find that the Hon ble High Court has considered the claim of Welding Electrodes under the definition of Capital Goods under Rule 2(a) of the Cenvat Credit Rules, 2004 and have come to the conclusion that the credit will not be allowable under this Rule. However, we find that the credit of duty paid on Welding Electrodes has been held allowable by several decisions of this Tribunal and hence the issue is no more res integra. We also find that several High Courts have also allowed such credit considering the same as allowable within the definition of Input under the Cenvat Credit Rules. One such reference can be made to the decision of the Hon ble High Court of Chhattisgarh in the case of Ambuja Cements Eastern Ltd. v. Commissioner of Central Excise, Raipur, 2010 (256) E.L.T. 690 (Chhattisgarh), wherein welding electrodes used for repair and maintenance purpose were also held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test evolved by the Apex Court in the case of CCE, Coimbatore v. Jawahar Mills Ltd., 2001 (132) E.L.T. 3 (S.C.), which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the user test to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace, etc. cannot be suspended in mid-air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of Capital Goods includes, components, spares and accessories of such capital goods. Accordingly, applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambitof Capital Goods as contemplated under Rule 2(a) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal is devoid of any merit. In 11. Jawahar Mills Ltd. (supra), heavily relied upon by the learned counsel for the assessee, the question which came up for consideration was whether the claim of Modvat credit by some manufacturers in respect of certain items by treating them as capital goods in terms of Rule 57Q was in order. Some of the items under consideration were power cables, capacitors, control panels, cable distribution boards, air compressors, etc. The Court examined the question in the light of the definition of capital goods given in Explanation to Rule 57Q, which read as follows : capital goods means - machines, machinery, (a) plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products; components, spare parts (b) and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose; and moulds and dies, (c) generating sets and weighbridges used in the factory of the manufacturer. 12.Inter alia observing that capital goods can be machines, machinery, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generating set would fall within the ambit and scope of definition of capital goods. The Court, went on to further hold that such equipment had to be treated as an accessory. As a matter of fact, in Saraswathi Sugar Mills case, the Court, while noticing the view taken in Rajasthan Spinning and Weaving Mills Limited said that as long as it could be shown that the item in issue was an integral part of the machinery, i.e., capital goods, it would fall in the definition of component and thus, by logical extension, come within the ambit of capital goods . 43.1 To be noted, Hon ble Mr. Justice D.K. Jain, (as he then was), was party to both the judgments rendered by the Supreme Court i.e., Rajasthan Spinning and Weaving Mills Limited as well as Saraswathi Sugar Mills Limited case. 43.2 Therefore, quite clearly, the two judgments referred to above cannot be read in the manner, as the Revenue is seeking to read them, that is, at cross purposes. In our opinion, the ratio of the two judgments, is that, as long as it is shown that the component and/or accessory is an integral part of the capital goods, (which, in turn, fall within the scope and ambit of the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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