TMI Blog2020 (1) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit, the items must be among those mentioned in this Rule and should have been used in the factory of the manufacturer and how the items are not used relevant. The words used in Rule 2(a) are used in the factory of manufacturer of the final product not used in the manufacture of final product . Therefore, once any item received in the factory is capital goods in terms of Rule 2(a) of the Cenvat Credit Rules, and is used in the factory, the manufacturer would be entitled to Cenvat Credit of excise duty paid in respect of the same. If the logic of the commissioner in the impugned orders are accepted, no capital goods Cenvat Credit can be allowed in respect of any item of capital goods enumerated in Rule 2(a) of the Cenvat Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s items of capital goods received by them for erection, installation and commissioning of Nephtha Cracker Plant. A team of officers from the Jurisdictional Central Excise Commissionerate, Rohtak, visited the appellant s premises to ascertain the correctness of the Cenvat Credit taken. The Officers found that the appellant had entered into composite lump sum turnkey contracts for various EPCC (Engineering, Procurement, Construction and Commissioning Contracts) projects with different contractors such as M/s Larsen Toubro Ltd., M/s Toyo Engineering Corporation, M/s IOT Engineering Projects Ltd., M/s Technimont SPA, M/s Paharpur Cooling Towers Ltd., M/s V.A. Tech Wabag Ltd., M/s Nicco Corporation Ltd., M/s Indian Oil Tanking Ltd., M/s Samsun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11AB and besides this, imposed penalty on the appellant company under Rule 15(2) of the Cenvat Credit Rules, 2002 read with Section 11AC of Central Excise Act, 1944. It was also held that the capital goods in respect of which the Cenvat Credit, in question, has been taken by the appellant, had been brought by their contractors and used in execution the EPCC projects on turnkey basis which resulted in coming into existence of the plant, which was immovable in nature and could not be considered as excisable goods and hence the capital goods used excisable goods and hence the capital goods used for setting up of such plants would not be eligible for Cenvat Credit. Another ground the denial of Cenvat Credit is that the Appellant were not the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jab Haryana High Court in the case of Commissioner of Central Excise, Ludhiana Vs. Pepsi Foods Ltd., reported in 2010(254) ELT-284 (P H), that in any case, since the appellant company have paid to their contractors for the eligibility of the capital goods procured by them, the same belong to the appellant, that the issue as to whether the various items of capital goods after being installed in the refinery become fixed to earth plant which is not excisable, is not relevant at all for considering the capital goods for Cenvat Credit, that in this regard he relies upon the judgment of the Tribunal in the case of Omax Auto Ltd. (Final Order No. 56592-56594/2013 dated 15.05.2013), that in terms of the EPCC contracts given to various contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2002-CX dated 15.02.2002 issued by the Board under section 37B of the Central Excise Act, that in any case, the appellant at the time of receipt of the goods in their factory, were not their owners and hence they were not liable for the Cenvat Credit and that the appellant, though a Public Sector Undertaking, have wilfully suppressed the relevant facts from the Department and hence longer limitation period under Proviso to Section 11A (c) has been correctly invoked and penalty on them under Rule 15(2) of Cenvat Credit Rules, 2002 read with Section 11AC has been correctly imposed. He, therefore, pleaded that the Commissioner s orders are absolutely correct. 6. We have considered the submissions from both the sides and peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liances, and is used in any manner in the factory of the manufacturer of the final products, would be covered by the definition of the capital goods and accordingly would be eligible for Cenvat Credit. There is absolutely no requirement that the capital goods at the time of receipt must be owned by manufacturer or that the same would cease to be capital goods, if they are installed in the factory and become fixed to earth. In fact, most of the capital goods the machinery, equipment or instruments covered by Chapter 84, 85 90, pipes and tubes, pollution control equipment refractories, and storage tanks are required to be installed and after installation, the same put together constitute a manufacturing plant, which is a fixed to earth stru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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