TMI Blog2020 (1) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... activity falls outside the scope of this Act. The key terms used in the charging section are excisable goods , manufacture and production . Excisable goods is defined in Section 2 (d) and manufacture in section 2 (f). The term production is not defined in the Act and neither is the term goods . Central Excise Registration is required for a manufacturing facility and not for any facility owned by the manufacturer. If there are more than one manufacturing facilities, each of these require a separate registration. In fact, the appellant themselves have two registrations. There are cases where the same factory is split on to opposite sides of a road or pipeline or railway track. In such cases, effectively, it is the same factory with different parts of it working on either side. For such cases, CBEC s manual instructs that a single registration may be given - The present case is not one such. It is case where the assessee has a registered manufacturing facility and a facility 48 km away where no manufacturing but only some processing (which undisputedly does not amount to manufacture) takes place and the two facilities have a common pipe through which the processed gas i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le/ taxable under both Central Excise and GST Law. Their main manufacturing unit is in Lepetkata, Dibrugarh, Assam and their associated units are at Duliajan, Lakwa and Tinsukia which carry on certain activities. The units located at Duliajan and Lepetkata fall within the same jurisdiction of the same Central Excise Commissionerate, though under different ranges. 3. Another unit of the Appellant is at Lakwa where C2+Liquid is manufactured and transferred to the Lepetkata for which they have taken separate Excise Registration of Lakwa Unit as dutiable goods are being manufactured. 4. Their Duliajan unit is a gas compression and dehydration unit (hereinafter referred to as GDU ) where they purchase natural gas from Oil India Ltd, compress it and dehydrate and transfer it to their Lepetkata unit located 48 km away through a 18 inch pipe for use in manufacture of dutiable polymers. The gas which is left after manufacture (lean gas) is again sent by their manufacturing unit at Lepetkata unit to the Duliajan unit which pumps it back into the Oil India Ltd. 5. Thus, in their Duliajan plant they only compress and dry the gas and do not creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty and CVD. 05.05.2011 Filing of B/E No: 3413437 by BHEL at JNPT for the consignment of Gas Turbine Package imported by them against M/s.BCPL s order dt:30.03.2010 on payment of Customs Duty including total CVD + Addl. Duty ₹ 2,10,091/-. 07.07.2011 Filing of B/E No:40080060 by BHEL at JNPT for the consignment of Gas Turbine Package imported by them against M/s.BCPL s order dt:30.03.2010, on payment of Customs Duty including total CVD + Addl.Duty ₹ 21,125/-. 30.08.2011 Filing of B/E No:4504712 4504801 by BHEL at JNPT for the consignment of Gas Turbine Package imported by them against M/s.BCPL s order dt:30.03.2010, on payment of Customs Duty including total CVD + Addl. Duty ₹ 21,125/-. 26.09.2011 Despatch of consignments comprised in B/E NO.:4504581 vide L/R No:71271 ex-JNPT after clearance on payment of Customs Duty and Addl. Duty/CVD. 26.09.2011 Despatch of consignm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclusion in the Registration as Manufacturer of Excisable goods U/r 9 CER 2002 of three installations including the connected Compressor (GDU) Station Duliajan. 22.01.2014 Email from acesadmin@icegate.gov.in (Assistant Commissioner C.E.) for physical verification of the sites of the connected installations for inclusion in the Registration U/r 9 CER 2002 of BCPL Lepetkata Dibrugarh. 03.02.2014 BCPL s letter to Superintendent CE Dibrugarh furnishing 2 sets of requisite documents namely application for amendment to the CE Registration for inclusion of the three installations at Lakwa, Duliajan and Tinsukhia Rly. Sdg. And other financial documents. 01.03.2014 Query from Sr. Manager Finance BCPL about modus-operandi for availment of credit of CVD on consignment imported by BHEL, B/E being in the name of BHEL who raised importer invoice on BCPL. 04.03.2014 Email from Sr. Manager Finance BCPL to GM (PE) GAIL about admissibility of Credit to BCPL on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CPL being. BCPL being a joint venture Public Sector Company with Share holding of GAIL (CPSU) 70%, OIL (CPSU) and Numaligarh Refinery Ltd. (NRL), Govt. of Assam (PSU) engaged in the manufacture of HDPE, LLDPE AND PPLE of capacity 0.28 Million Ton per year usi9gn Natural Gas, Naptha Butene-1. The main Cracker Plant being located Lepetkata Dibrugarh while case sweetening and C2 + recovery Unit at Lalwa and (intake of Natural) Gas de-hydration Compression at Duliajan. Tinsukhia Rly. Sdg. Serving as facility unloading Naptha, one of the three main inputs. 27.09.2016 Assistant Commissioner CGST Excise Service Tax Dibrugarh s letter in response to BCPL s 8/07/2016 to BCPL rejecting U/Not:19/2016-CE(NT) dt:01.03.2016 the request for Single Registration for whole of Assam purportedly on the ground of installation of plant at different locations. 10.03.2017 BCPL s letter dt:10.03.2017 to Addl.Commissioner GST, C CE in response to Commissioner rejection dt:27.09.2016 of Single Registration clarifying the position as regards intertwined operations of the three instal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BCPL s letter to the Assistant Commissioner Dibrugarh highlighting the problem and difficulty on the part of BCPL in taking two registration and pressing for confirmation of Single Registration in order to enable to BCPL to carry forward the credit on capital goods installed at Duliajan plant, purportedly relying upon CESTAT s ruling in Adani Gas Vs. CCE dt:30.01.2017. 25.09.2017 BCPL s representative meeting with Chief Commissioner GST C CE Shillong. 27.09.2017 BCPL s letter in continuation to their representative meeting with Chief Commissioner GST Shillong urging him to supersede the decision dt:26.09.2017 of Joint Commissioner CGST CE purportedly denying single registration, admissibility of credit on Capital goods and carrying forward in the new GST Regime. 20.10.2017 BCPL s letter to Commissioner GST Dibrugarh and Chief Commissioner CGST Shillong urging for superseding the negative decision of JCE-CGST dt:26.09.2017. 25.10.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of final products. (2) Large number of raw materials are common and received/proposed to be received commonly for both/all the premises. (3) Common electricity supplies. (4) There is common labour/work force. (5) Common administration/work management. (6) Common sales tax registration and assessment. (7) Common Income Tax assessment. 9. He would urge that both their plants are only separated by their pipeline and hence they squarely fall under this para and hence are eligible for a single registration. 10. As an alternative argument, he states that even if they are not granted a single registration, CENVAT credit on the capital goods used in their processing plant at Duliajan should also be allowed to be taken and used in their Lepetkata plant. 11. Ld. DR opposes the claim of the appellant and supports the impugned letter. He also asserts that the appellant is not entitled to CENVAT credit on capital goods not used in the manufacture of their final products. 12. We have considered arguments on both si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in clause (a) above, on excisable goods excluding goods produced or manufactured in special economic zones specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule. Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured,- (i) Omitted. (ii) by a hundred per cent export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods in terms of the above definition and the goods must be excisable goods and they must be either manufactured or produced. The definition of manufacture in section 2(f) is an inclusive definition indicating what all elements need to be included in the manufacture. Through a series of judicial decisions, it is now well settled that every processing of goods does not amount to manufacture and only such processes which result in emergence of new distinct, marketable goods amount to manufacture. Else, excise duty cannot be levied as mere processing does not amount to manufacture. It is not open for the officers to treat any odd process as manufacture and to compel the processor to obtain registration and pay excise duty. Conversely, it is not open to the processor to say that he wants to call his process as manufacture even if it is not and to ask for central excise registration and pay excise duty. However, the definition of manufacture under the Central Excise Act includes any activity which is incidental or ancillary to manufacture. For instance, packing (except in respect of some goods where a legal fiction is created), does not amount to manufacture. However, if the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise (No. 2) Rules, 2001 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules. (2) The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration. (3) The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board. CBEC s manual chapter2 para 3.2 as applicable during the period: 3.2 Separate registration is required in respect of separate premises except in cases where two or more premises are actually part of the same factory (where processes are interlinked) but are segregated by public road, canal or railway-line. The fact that the two premises are part of the same factory will be decided by the Commissioner of Central Excise based on factors, such as: (1) Interlinked process product manufactured/produced in one premises are substantially used in other premises for manufacture of final products. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e treated as a part and parcel of the manufacturing facility at Lepetkata. d) Conversely, it is also not open to the Revenue to compel registration of premises of any assessee where no manufacturing takes place even if such places are connected by pipes to a manufacturing facility. It is also not open to the Revenue to demand duty on the processing activities carried out at such premises even if they are connected by a pipe to actual manufacturing unit. e) The provisions relating to the Registration are in the CE Act and Rules and it is not open to this Tribunal to modify them or enlarge or constrict their scope. 23. In conclusion, we find in the given factual matrix that the appellant is not entitled to get their Duliajan processing plant included in their registration for Lepetkata manufacturing plant. CENVAT Credit. 24. The second issue to be considered is whether the appellant is entitled to the CENVAT credit on the capital goods and services received at their Duliajan plant even if it is not part of their registered premises. CENVAT credit is governed by the Cenvat Credit Rules, 2004 framed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub- Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. 25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between strict interpretation and literal interpretation . We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be implied. One can only look fairly at the language used. 26. This judgment of the five member Constitutional bench of the Supreme Court, which prevails over any contrary decisions of the lower courts or smaller benches leaves us with no option but to interpret the Act and Rules as they were framed and applicable during the period without any intendment and regardless of the consequences. 27. Our role is to apply the Rules as they existed during the relevant period. Rule 2(a) of the CCR 2004 defines capital goods as below: (a) capital goods means:- (A) the following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one for manufacture of cement/ clinkers even though these inputs were not used in the factory of manufacture. A perusal of this judgment shows that their Lordships interpreted the erstwhile MODVAT Rules under which Rule 57J provided for credit of duty in respect of inputs used in an intermediate product which, in turn, is used for manufacture of final products. The CENVAT Credit Rules which replaced the MODVAT Rules did not have a provision corresponding to Rule 57J. Their Lordships held that there is no difference between the CENVAT and MODVAT Rules and even in the absence of an explicit provision, credit of CENVAT of explosives is still available. The present case is completely different as the question is not with respect to MODVAT Credit/ CENVAT Credit on inputs but is the question of CENVAT Credit on capital goods. 31. Learned counsel also relied upon the judgement of the Apex Court in the case of Vikram Cement [2006 (197) ELT 145] in which it was held that MODVAT /CENVAT credit on capital goods used in captive mines which form an integrated unit with the factory is available. The ratio of this judgment does not apply to the present case as we have specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X
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