TMI Blog2019 (10) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) of Rule 57Q nor the said items qualify as components, spare parts and accessories of the machines - HELD THAT:- The said items are specified capital goods which are used as handling equipments in the sintering plant, coal handling plant etc. for feeding various raw materials during the course of the manufacturing of final product and it is integrally connected with the manufacturing process - the said bull dozers and excavators are integral part of the plant and machinery. Therefore, appellant is entitled to apply for Cenvat Credit. Electric Tele communication signals, telephone push bottons, telecom A.V. Aids, Video Amplifier Cord, telecom parts, telephone cables and telecom cords - denial on the ground that they were not used for producing or processing any goods or bring about change in the final product - HELD THAT:- The items in question were used in control system and various production shops like blast furnace, steel melting shop, blooming and billet mills, etc. for communicating transfer of raw material and intermediate goods to the next process and also for communicating the production process data to the next stage users so that production process be carried on wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing process - HELD THAT:- The lighting fittings are essential as they illuminate the factory area in order to maintain continuity in manufacturing process round the clock without any hindrance, especially in darkness when natural light is not sufficient and also not available at night, in various areas of the plant - the said lighting fittings are essentially a pre-requisite for manufacture of goods therefore, entitled to Cenvat Credit in terms of Rule 57Q and Rule 57A of Central Excise Rules. Amonia Plaper/ photo chemical/ ammonia printing machine/ photocopying apparatus - It is alleged that these items were used in preparation of drawing and designing and thus does not find its use in production or processing - HELD THAT:- The ammonia paper is used for preparation of drawing and designing of final products and blue prints of various spare, components etc. which are manufactured in the various workshops within the factory of the appellant, without which the manufacture of goods is hindered. Hence, by applying the user-test principle, the said item qualify as capital goods under rule 57Q of the Excise Rules. Monoblock Concrete Sleepers and body crossing etc. - deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the factory and is integrally and essentially connected with manufacture of final products. Hence, qualify as capital goods under Rule 57Q. Therefore, the appellant is entitled to avail cenvat credit on the above items. Diesel oil engine - Denial on the grounds that although the said item is used in water treatment plant of the appellant, it is not a specified capital goods item - HELD THAT:- The diesel oil engine is used in various places like water treatment plants, coke oven etc. for the purpose of recycling of waste water. It is further observed that the cenvat credit was allowed on caustic soda, water treatment chemical etc. as input as it is essentially used in relation to manufacture of final product. Hence, the said item is eligible for Cenvat Credit as input if not eligible for credit under the category of capital goods - credit allowed. Drilling Machine - denial on the ground that the said machine did not fall under the specified category of Rule 57Q - HELD THAT:- The said machine is used as parts, components, etc. of various machine, shops and other engineering shop for the purpose of manufacturing of various capital goods and also used for maintenance of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of Iron and Steel items at their premises. Further, in the workshops, namely, Roll Turning Shop, Refractory Material Plant I II, Research and Control Laboratory, Foundry and Pattern Shop, Forge Shop, Machine Shops, Steel Structural Shop, TPL Workshop etc., were installed. the Appellant manufactured a number of machinery/parts/components/ accessories for use in the plant to complete the manufacturing activity. 4. The appellant cleared their final product on payment of duty and availed Cenvat Credit on the inputs and capital goods used in the manufacture of the final product. For the period 10 June 1994 to 31 May 1995, fourteen show cause notices were issued to the appellant for the period April 1994 to December 1994, to deny Cenvat Credit on various inputs and capital goods used by the appellant in their manufacture of the final product. Six show cause notices were issued for the period January 1995 to June 1995. In addition to the above 13 more show cause notices were issued for the period June 1998 to July 1999. With regard to initial 14 show cause notices, cenvat credit sought to be denied of ₹ 8,86,67,092/- on account of admissibility of capital goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious capital goods which were used within the factory of manufacturer, in terms of the said explanation, Cenvat Credit would have been admissible on iron and steel items used in fabrication of such capital goods. It is further submitted that the steel is to be considered as used in or in relation to manufacture of dutiable products since without use of such steel, activity of manufacturing could not have been undertaken. Since the impugned items have been used for fabrication of various parts / components of specified capital goods, hence the appellant is entitled to avail Cenvat Credit. 8. She further submits that the definition contains an inclusive‟ part, which only further widens the scope and meaning of the term input, therefore, the appellant is entitled to the benefit of credit on the above items and the items used as inputs by the appellant are to be interpreted widely and not narrowly as was done by the learned Commissioner. To support this contention she relied on the decision of Hon‟ble Apex Courts in the case of J K Cotton Spg. Wvg. Mills Co. Ltd. Vs. Sales Tax Officer, Kanpur, 1997 (91) ELT 34 (SC), CCE Vs. Rajasthan State Chemical Work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparatus, tools or appliances used for aforesaid purpose; and, c) moulds and dies, generating sets and weigh bridges used in the factory of the manufacturer. 14. The observations in the impugned order by the learned commissioner is that the items claimed to be capital goods by the appellant are not capital goods in terms of Rule 57Q of the Central Excise Rules 1994. 15. The issue is therefore, that all the items in question are for entitlement of cenvat credit in terms of rule 57Q of central excise rules can be called as capital goods or not. The same are discussed as under:- (I) Air Cooler, Air conditioner, Ventilation systems, water cooler: Learned commissioner denied the Cenvat credit on the ground that these are not integrally connected in the production and processing of the goods. These items have been used in plant to be provided desired environment than in production in the factory. We find that air conditioner have been used in the control room where computers are installed to monitor the production. For example, the Blast furnace which are operated through computers, in such monitoring rooms w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. In view of the above, we hold that the said bull dozers and excavators are integral part of the plant and machinery. Therefore, appellant is entitled to apply for Cenvat Credit. (III) Electric Tele communication signals, telephone push bottons, telecom A.V. Aids, Video Amplifier Cord, telecom parts, telephone cables and telecom cords: The said items were used by the appellant in the factory but it is alleged that they were not used for producing or processing any goods or bring about change in the final product. Therefore, Cenvat Credit was denied. We find that the items in question were used in control system and various production shops like blast furnace, steel melting shop, blooming and billet mills, etc. for communicating transfer of raw material and intermediate goods to the next process and also for communicating the production process data to the next stage users so that production process be carried on without interruption for manufacturing of final product. In view of this, we hold that the said items in question have been integrally used by the appellant for the manufacturing process of final goods. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the factory and not used in the manufacturing process. Therefore, credit is not admissible. We find that lighting fittings are essential as they illuminate the factory area in order to maintain continuity in manufacturing process round the clock without any hindrance, especially in darkness when natural light is not sufficient and also not available at night, in various areas of the plant. Therefore, said lighting fittings are essentially a pre-requisite for manufacture of goods therefore, entitled to Cenvat Credit in terms of Rule 57Q and Rule 57A of Central Excise Rules. (VII) Amonia Plaper/ photo chemical/ ammonia printing machine/ photocopying apparatus It is alleged that these items were used in preparation of drawing and designing and thus does not find its use in production or processing. We find that ammonia paper is used for preparation of drawing and designing of final products and blue prints of various spare, components etc. which are manufactured in the various workshops within the factory of the appellant, without which the manufacture of goods is hindered. Hence, by applying the user-test principle, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de bracket / forklift truck part /rail brage, clamp plate, elastic rail. They are being used as part of the material handling equipments. Thus do not bring any change in any substance for manufacture of final product. Thus not entitled to Cenvat Credit as per the impugned order. We find that items have been used as material handling equipment for storing / mixing /transporting the raw material in ore handling plant, sintering plant, coal handling plant, steel melting shop and other workshops. Further, without the internal transport of raw material, manufacture cannot take place, hence, is entitled to avail Cenvat Credit on the above said items. (XI) Motor Vehicle parts Cenvat Credit sought to be denied on the grounds that these parts are meant for general transportation of vehicle and does not fall under Rule 57Q. We find that these items are used as part of ingot metal, bogie cars and fork lift trucks which are used for transportation of various raw materials within the factory and is integrally and essentially connected with manufacture of final products. Hence, qualify as capital goods under Rule 57Q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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