TMI Blog2007 (8) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent-assessee. A show cause notice dated 20-1-2005 was issued by the Additional Commissioner, Central Excise Commissionerate, Jaipur-II asking the respondent-assessee as to why the amount of Rs. 37,29,625/- availed by the respondent-assessee as irregular Cenvat credit should not be recovered from it under Rule 12 of the Cenvat Credit Rules, 2002 (hereinafter referred to as the Rules of 2002) read with Section 11A of the Central Excise Act, 1944. The respondent-assessee was also asked to show cause as to why penalty should not be imposed upon it under Rule 13 of the Rules of 2002 read with Section 11AC of the Central Excise Act, 1944. The respondent-assessee was also asked to show cause as to why penalty should not be imposed upon it under Rule 25 of the Central Excise Rules, 2002 as well as to show cause as to why interest should not be recovered from it under Rule 12 of the Rules of 2002 read with Section 11AB of the Central Excise Act, 1944. The said show cause notice was issued on the ground that the respondent-assessee, which is engaged in manufacture of Lead, Zinc and other material appears to have wrongly availed Cenvat credit to the tune of Rs. 37,29,625/- on cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-assessee has availed Cenvat credit by misconstruction and misinterpretation of law and, accordingly, disallowed the Cenvat credit of Rs. 37,29,625/-, as it was found that the same was wrongly availed. The Additional Commissioner, Central Excise Commissionerate, Jaipur-II accordingly passed the order for recovery of the said amount with interest and penalty of the same amount was also imposed upon the respondent-assessee. 3. Being aggrieved by the said decision, the respondent-assessee herein referred an appeal before the Commissioner (Appeals), Customs and Central Excise, Jaipur-II. The Appellate Authority by its order dated 5th October, 2005 upheld the order in connection with demand of Rs. 37,29,625/-. However, the Appellate Authority set aside the order of penalty imposed under Section 11AC of the Act, 1944. 4. Being aggrieved by the same, the respondent-assessee filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. The Tribunal vide its final order dated 30-1-2006 set aside the order passed by the Commissioner (Appeals), Customs and Central Excise, Jaipur-II and allowed the appeal filed by the respondent-assessee. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956. Learned Counsel Mr. Mathur has relied upon para 11 of the said judgment, which reads as under : "Building materials including lime and cement not required in the manufacture of tiles for sale cannot, however, be regarded within the meaning of Rule 13, as raw materials in the manufacture or processing of goods or even as "plant". It is true that buildings must be constructed for housing the factory in which machinery is installed. Whether a building is a "plant" within the meaning of Rule 13, is a difficult question on which no opinion need be expressed. But to qualify for specification under Section 8(3)(b) goods must be intended for use of the nature mentioned in Rule 13, in the manufacture of goods. Building materials used as raw materials for construction of "plant" cannot be said to be used as plant in the manufacture of goods. The Legislature has contemplated that the goods to qualify under Section 8(3)(b) must be intended for use as raw materials or as plant, or as equipment in the manufacture or processing of goods, and it cannot be said that building materials fall within this description. The High Court was, therefore, right in rejecting the claim of the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by learned Counsel Mr. Mehta that in any case, since the Tribunal has not gone into this aspect that unless the mines are protected and kept in a proper condition, the final product is not possible, the matter may be sent back to the Tribunal for decision on the said point. 11. The basic question which is required to be considered by us is whether the Tribunal is right in allowing the appeal of the respondent-assessee and whether the respondent-assessee is entitled to get benefit of Cenvat credit for the use of cement as input? It is required to be noted that the only point which was argued on behalf of the respondent-assessee before the Tribunal was whether cement used as construction/building material in the mines is eligible as input for the purpose of availment of Cenvat credit under the provisions of the Cenvat Credit Rules, 2002? The specific case of the respondent-assessee before the Tribunal was that the Cenvat credit is available on the use of cement which is used as inputs and in order to substantiate the same reliance was placed on Vikram Cement's case (supra). Before the Tribunal, it was not argued on behalf of the assessee that the cement be treated as capital goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, it is clear that cement is always used as building material and it is always used in construction or may be used for the purpose of filling in holes, and therefore, it is not eligible inputs for the purpose of availment of Cenvat credit. Regarding the argument of Mr. Mehta that cement can be treated as capital goods is concerned, it is not necessary to examine this point though Mr. Mathur argued that it can never be treated as capital goods looking to the definition of the capital goods under the Rules as this point was not argued before the Tribunal and the only point which was argued before the Tribunal was whether the Cenvat credit was available on the product i.e. cement which was used outside the factory in the mines and not within the factory premises. The Commissioner (Appeals) has rightly found that the Cenvat credit is not available for the use of cement as inputs. Recently, the Division Bench of this Court in D.B. Central Excise Appeal No. 33/2007, to which one of us (Majmudar, J.) was a party, has taken a view that the material which is used for repairs and maintenance of the plant and machinery, no Cenvat credit is available on such material and the same cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Mehta regarding availment of Cenvat credit as capital goods, the same was not even argued before the Tribunal and the only point argued was whether cement which was used as building material in the mines eligible as inputs for the purpose of availment of Cenvat credit? Since, in our view, cement, which is a building/construction material and which is used in the mines as construction, repairing or maintaining the mines in a proper condition, is not eligible input for availment of Cenvat credit and no Cenvat credit is available on the same. In that view of the matter, the ultimate decision taken by the CIT (A) is required to be upheld. In our view, the Tribunal has committed a substantial error of law in allowing the appeal of the respondents by holding that the cement used in the mines is eligible as inputs for the purpose of availment of Cenvat credit. 13. The appeal is accordingly allowed. The order dated 30-1-2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi is set aside and the order passed in appeal by the Commissioner (Appeals), Customs and Central Excise, Jaipur-II is restored. No order as to costs. - - TaxTMI - TMITax - Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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