TMI Blog2023 (9) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... d capital goods should have been used in the production of dutiable finished goods. There is no such dispute raised in the SCN that the capital goods fabricated by the Appellant out of the inputs have not been used for manufacture of dutiable finished goods. Further, the Appellant have maintained proper records in the nature of purchase vouchers for the inputs, receipt of inputs in the factory of production and the utilisation of the same in fabrication/manufacture of capital goods. Such utilisation is also supported by the certificate of the Chartered Engineer which have not been found to be untrue - further there is no allegation in the SCN that the Appellant have clandestinely removed any of the inputs received. So far as beams/joints, etc., which have been used in the preparation of stand, etc., to support Plant and machinery or as structure for support of capital goods, the same is held allowable by Hon ble Madras High Court in the case of M/S. INDIA CEMENTS LTD. VERSUS THE CUSTOM, EXCISE AND SERVICE TAX THE COMMISSIONER OF CENTRAL EXCISE, [ 2015 (3) TMI 661 - MADRAS HIGH COURT] . Extended period of limitation - HELD THAT:- There is no case of any concealment, mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal goods/ plant and machinery being letters dated 15.06.2010, 21.07.2010, 08.10.2010 and 20.10.2010. As the Appellant did not hear anything from the Revenue, it accordingly took back the credit of amount of Rs.1,62,60,467/- (reduced amount except on PCS Poles cement) in the Cenvat Register and submitted intimation to that effect to the Assistant Commissioner by letter dated 01.11.2010. 4. Revenue issued SCN dated 04.01.2011 invoking extended period of limitation, as it appeared to Revenue that during the period December, 2005 to March, 2010, the Appellant has taken Cenvat credit wrongly on the goods falling under Chapters 72, 73, 25, 6807, 38, 39 and Chapter 8415 as detailed in the Annexure to the SCN in contravention of Provisions of Rule 3(1) read with Rule 2(a)(A) (capital goods) of CCR, 2004. Further taken notice that the said amount of Cenvat credit has been utilized for the payment of duty on final products, though the Appellant is liable for disallowance of credit under provisions of Rule 14 of CCR read with Proviso to Sec 11A(1) of the Act. Further penalty was proposed under Rule 15 of CCR read with Sec 11AC of the Act. The SCN proposed to deny the amount of credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to the entitlement of the appellant to the CENVAT credit. 6. Thus the appeal is allowed by way of remand. The stay petition is also disposed of. 7. Pursuant to remand, the matter was re-heard and in the course of Hearing, the Appellant filed additional submissions and explanations. Learned Commissioner called for report from the Deputy Commissioner. The Deputy Commissioner submitted the report dated 19.06.2014 to the Commissioner, inter alia, stating that it is contended that MS items were used in fabrication of various capital goods supported by certificate dated 16.02.2012 of Chartered Engineer, which states that Appellant used various inputs to make new and distinct articles/ capital goods and also main equipment. Such capital goods could be dismantled, transported and relocated to another site without any damage to the same. The Range Officer had visited the factory and had submitted the verification report to the effect:- (i) The Cenvat credit availed on various items appears to be inadmissible under the category of capital goods as the said items were falling under Chapters of CETA (other than specified under Rule 2(a)(A)(i) of CCR). (ii) Variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assessee and they have not furnished any other documents. Further observed that the Certificate of Chartered Engineer is not flawless and only on verification of invoices and drawings only establishes the manufacture of capital goods in general, but it does not signify the manufacture of capital goods in question out of the same inputs in the absence of factory records. Thus, Deputy Commissioner found that Cenvat credit was not admissible in its entirety. 9. The Commissioner passed the Re-adjudication Order being OIO dated 17.07.2014, framing the issues as follows: (a) Whether or not the noticee are eligible for credit totalling Rs.1,67,63,105/- availed on the following items as capital goods: (i) MS Channels, MS Beams, TMT Bars, HR Coild, MS Joists, HR Sheets, HRC Plates etc., falling under Chapter 72 of the first schedule to CETA, 1985 involving credit of Rs.1,58,58,360/- (ii) PSC Poles/Cement falling under Chapter 68 25 of the first schedule of CETA, 1985 involving credit of Rs.23,049/- and Rs.3,42,802/- respectively. (iii) Firecrete normal falling under Chapter 38 of the First schedule to CETA, 1985 involving credit of Rs.1,493/- (iv) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of such capital goods like furnace, rolling mill, support structures for furnace, control panel, trolley for transport of goods within the factory, cannot take place. The trolleys are moved on rails which are installed on the shop floor of the factory. 12. Learned Commissioner has erred in observing that various items of plant and machinery are embedded to earth and attained the character of immovable property, and they are no longer goods. Relying on the Larger Bench ruling of this Tribunal in Vandana Global Ltd vs CCE, Raipur [2010 (253) ELT 440 (Tri- LB)], Commissioner also observed that MS items used for repair and maintenance of plant and machinery are neither capital goods nor inputs. The Appellant has furnished details of usage of inputs in question and utilization in the capital goods with details of Cenvat credit involved as follows: ITEMS USED MANNER OF USE CENVAT AMOUNT (in Rs.) Steel Tubes, MS Tubes, HR Coils, HR Sheets, HR Plates, MS Plates, MS Angels and MS Beams, other MS Items Fabrication of furnace 84,21,874/- St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther urged that the ruling of the Larger Bench of the Tribunal in Vandana Global Ltd (supra) has been reversed by the Hon ble High Court of Chattisgarh and have held that Cenvat credit is available on items like angels, joists, beams, bars, etc., which go into fabrication of structures embedded to earth, to be treated as inputs used in relation to the manufacture of final products, as inputs for capital goods. Hon ble High Court had framed the following questions of law for decision: 4. In the light of the contents of the impugned order of the Tribunal and submissions of the assessee and the Revenue following substantial questions of law are formulated for consideration : (A) Whether the terms capital goods excludes the structures embedded to earth? (B) Whether the goods like angles, joists, beams, bars, plates, which go into fabrication of such structures are not to be treated as input used in relation to their final products as inputs for capital goods, or none of the above? (C) Is the amendment brought in CENVAT Credit Rules, 2004 as per Rule 2 of the CENVAT (Amendment) Rules, 2009 retrospective in nature considering is it clarificatory to be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered under the meaning of capital goods as per Rule 2(a)(A) of CCR. Further observed that CBEC has clarified that all parts, components and accessories which are to be used with the capital goods in (i) and (ii) of Rule 2(a)(A) and classifiable under any Chapter heading are eligible for availment of Cenvat credit. A plain reading of (iii) [components, spares and accessories of goods specified in (i) and (ii)] cannot lead to a different conclusion either. In India Cements Ltd, Hon ble Madras High Court also referred to rulings of Hon ble Supreme Court in Rajasthan Spinning and Weaving Mills Ltd [2010-TIOL-51-SC-CX] and Saraswati Sugar Mills [2011-TIOL-73-SC-CX] and distinguished the ruling of the Apex Court in Saraswati Sugar Mills. Learned Counsel also plaed reliance on other rulings which are as follows: a) CCE, Bangalore-II vs SLR Steels Ltd [2012 (280) ELT 176 (Kar)] b) Solid and Correct Engineering [2010-TIOL-25-SC-CX] c) Singhal Enterprises Pvt Ltd vs CC CE, Raipur [2016 (341) ELT 372] d) CC, CE ST, Bilaspur vs Singhal Enterprises Pvt Ltd [2018 (359) ELT 313 (Chattisgarh)] e) Prism Cement Ltd vs CCE ST [2016-TIOL-3261-CESTAT-DEL] f) Bin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of MS steel, etc., in the factory of production. This fact is not disputed. Further revenue have found that the Appellant have fabricated various capital goods/Plant and machinery like pollution-control equipment, heating furnace, casting machine, coating machine, chimney, rolling machine, threading machine, Control Panel, etc., during the period under dispute. We further find that with the introduction of Cenvat credit rules 2004, capital goods as defined in rule 2(a)(A) of CCR includes items like pollution-control equipment, storage tank which are practically immovable. Thus, the concept of movable or immovable for allowing credit have been done away with. We further find Rule 2(K) of CCR entitles a manufacturer to take credit of all items/goods received in the factory of production whether forming part of the finished product or not. Even inputs received for fabrication of capital goods are also entitled for Cenvat credit. Only condition is that such fabricated capital goods should have been used in the production of dutiable finished goods. There is no such dispute raised in the SCN that the capital goods fabricated by the Appellant out of the inputs have not been used for m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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