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TMI Blog2017 (10) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... e imposed upon it. 4. In response, the assessee had sent a reply, to the show cause notice, dated 21.12.2001, inter alia stating that the goods against which, credit was availed, are essential in connection with the manufacturing/processing activities of the final products and it was also stated that, the said goods are parts, accessories and components of the machines. 5. However, not satisfied with the said reply given by the assessee, the original adjudicating authority, vide order dated 09.09.2003, disallowed the Cenvat Credit of Rs. 19,94,383/- and also, imposed a penalty of Rs. 1,000/-. Aggrieved over the said order in original passed by the adjudicating authority, the assessee preferred an appeal before the Commissioner (Appeals), who also in turn, has rejected the claim of the assessee, by his order dated 04.02.2004 stating that the items against which, credits were sought for, are not eligible for credit, as capital goods and also, not as inputs and accordingly, rejected the appeal filed by the assessee. 6. Having aggrieved over the said order, the assessee filed an appeal before the CESTAT, Chennai. The CESTAT, Chennai, in its order dated 20.04.2011, had also rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring for the assessee, the impact of the said Judgment in ThiruArooran's case cited supra, of a Division Bench of this Court, where, one of us (R.Suresh Kumar, J,) is a party, to be adverted to. 12.In the Judgment of ThiruArooran's case cited supra, three appeals were taken together by the Division Bench, where also similar questions of law were framed. The Division Bench has noted that one of the impugned order in the said batch of appeals in ThiruArooran's case, the CESTAT, SZ, Chennai, has dismissed the said appeal, fully relying upon the Larger Bench decision of the Tribunal in Vandana Global's case cited supra, and the relevant portion of the said Judgment noting this factor is as follows: "11. This time around the Revenue was aggrieved and, therefore, an appeal was preferred with the Tribunal. The Tribunal, via a cryptic judgment reversed the order of the Commissioner (Appeals) by relying upon its own judgment, rendered by a Larger Bench, in Vandana Global Limited. 12.It is, in these circumstances that TAS has preferred an appeal with this Court." 13.The first issue taken up for decision of the Division Bench is as follows: "14.1.The first issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, their eligibility for grant of Credit was pivoted on description, there being no reference to any Chapters. Therefore, components, spares and accessories of capital goods, which fell within the specified chapters were also entitled to Modvat Credit. 22. Quite clearly, therefore, the argument of Ms.Hemalatha that because components, spares and accessories, fall in chapter 72, they cannot be treated as capital goods within the meaning of Rule 2(a)(A) of the 2004 Rules on a parity of reasoning, cannot be accepted. According to us, as long as the components, spares and accessories, pertain to capital goods falling in Rule 2(a)(A)(i), i.e., Chapter 82,84,85,90 and Heading No.68.05 and 68.04 of the first schedule to CETA, they would have to be treated as capital goods and would, hence, be eligible for Cenvat credit. 23. Besides the aforesaid, let us advert to the view taken in various judgements on this very issue from time to time. A Division Bench of this Court, in the matter of: Commissioner of C.Ex., Tiruchirapalli V. India Cements Ltd., 2012 (285) E.L.T. 341 (Mad), was called upon to decide as to whether structural steel items, viz., Rebar Coils, CTD Bars, TOR Steel an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en though steel plates and M.S.Channels used in the fabrication of chimney would fall within the ambit of "capital goods". 24. A similar question came up for consideration, once again, in another case, i.e., CCE, Tiruchirapalli V. India Cements Ltd. 2014 (305) ELT 558 (Mad.). In this matter, a Division Bench of this Court was called upon to answer the following question of law: "Whether the Tribunal is correct in holding that, structural steel items viz., M.S.Plates, Angles, Channels and HR Sheets used for civil construction activity, are capital goods eligible for credit in terms of Rule 57Q as it stood at the relevant time? " 24.1. The Division Bench answered the question of law in favour of the Assessee. While doing so, the Division Bench distinguished the judgment of the Supreme Court in Saraswathi Sugar Mills V. Commissioner of Central Excise, Delhi 2011 (270) E.L.T. 465 (SC). and, instead, relied upon the judgment of the Supreme Court in CCE V. Rajasthan Spinning and Weaving Mills 2010 (255) ELT 481 SC and, while doing so, made the following observations: "10. As far as the reliance placed by the Revenue on the decision reported in 2011(270) E.L.T.465 (SC) (Sara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese judgments." 17.Further, it has been held in the said Judgment of the Division Bench in ThiruArooran's case, on the applicability of Vandana Global's case, which is extracted hereunder: 37. A similar conclusion was reached by the Gujarat High Court in the matter of: Mundra Ports & Special Economic Zone Ltd. V. CCE & Cus 2015 (39) STR 726 (Guj.). The Division Bench of the Gujarat High Court in Mundra's case, disagreed with the view taken by the Tribunal in the case of: Vandana Global Limited that the 2009 Notification would have retrospective effect. Pertinently, the Tribunal in Vandana Global Limited, has based its view on the speech made by the, then, Finance Minister. As a matter of fact, that part of the speech of the Finance Minister, which dealt with the amendment, was also relied upon by Ms.Hemalatha." 18.The Division Bench in ThiruArooran's case has also taken into account, the submissions made by the learned counsel appearing for the Revenue that, the issue raised in the said batch of cases cannot be decided on the basis of Rajasthan Spinning & Weaving Mills' case, but, only on the basis of Saraswathi Sugar Mills' case. This was also consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and machinery, which manufactures the final product. Therefore, in our opinion, whether the "user test" is applied, or the test that they are the integral part of the capital goods is applied, the Assessees, in these cases, should get the benefit of Cenvat Credit, as they fall within the scope and ambit of both Rule 2(a)(A) and 2k of the 2004 Rules. 45. For the foregoing reasons, we answer the questions, in all the three (3) appeals, which are set forth above, in favour of the Assessees and against the Revenue. 46. Accordingly, the captioned appeals are allowed and the impugned judgments of the Tribunal, in each of these appeals, are set aside. However, there shall be no order as to costs." 19.Following the said Judgment in ThiruArooran's case, yet another appeal, of course, filed by the Revenue in C.M.A.No.2483 of 2016, on the same issue, came up for consideration before another Division Bench of this Court where one of us is a party (S.MANIKUMAR, J.,). (The Commissioner of Central Excise & Service Tax, Tiruchirapalli v. The Customs Excise and Service Tax Appellate Tribunal, South Zone Bench, Chennai, and another). In that case, the Revnue, being the appellant, had ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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