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TMI Blog2025 (2) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.12.2020, framed the following substantial question of law for appropriate answer: "Whether the gas plant located at Duliajan belonging to the appellant, which supplies gas for manufacturing polymers at Lepetkata forms part of the manufacturing unit at Lepetkata so as to enable appellant to claim Cenvat Credit on capital goods installed at Duliajan?" 3. The brief facts of the case are that the appellant Company was formed as a Central Public Sector Undertaking at Dibrugarh as a Joint Venture of M/s. Gas Authority of India Limited, OIL India Limited (OIL), Numaligarh Refinery Limited (NRL) and Government of Assam, having its registered office at Guwahati. The appellant Company is manufacturing and selling various grades of dutiable polypropylene. The main manufacturing unit of the appellant Company is located at Lepetkata, Dibrugarh, Assam, whereas its associated units are located at Duliajan, Lakwa and Tinsukia wherein certain activities relating to manufacture of final product are being undertaken. 4. The Duliajan Unit is a gas compression and dehydration unit where they purchase natural gas from OIL India Limited and after compressing and dehydrating the gas, transfer it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Duliajan plant and Lepetkata plant by inclusion of the former in their registration certificate already issued for the latter. (b) Admissibility of CENVAT Credit on the capital goods received in their Duliajan plant based either on common registration or irrespective of the registration." 8. Both the issues were decided against the appellant Company by the Tribunal while concluding that one registration for separate units which are situated at different places, cannot be issued because the Duliajan Unit is not a manufacturing unit and, therefore, CENVAT Credit on capital goods (both domestic and imported) cannot be availed for Duliajan Unit. 9. Assailing the impugned order passed by the Tribunal, the appellant Company is claiming that the Duliajan Unit is a captive unit of the main plant situated at Lepetkata having been owned and controlled by the main plant constituting one integrated unit forming part thereof. 10. It is contended on behalf of the appellant Company that it is true that at the Duliajan Unit, natural gas purchased from the OIL India Limited is compressed and dehydrated and thereafter, transferred to Lepetkata Unit through pipelines but the fact remains tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Sr. S.C., CBDT, IT (NER), appearing for the respondent-Revenue has vehemently opposed the appeal and has argued that the Tribunal as well as the Commissioner has rightly rejected the request of the appellant Company for availing CENVAT Credit on capital goods (both domestic and imported) used at the Duliajan Unit because the said Unit is situated around 48 Km away from the manufacturing unit which is situated at Lepetkata and also because no final product is being produced at Duliajan Unit. 16. Mr. Keyal has invited our attention towards the order passed by the Commissioner dated 26.09.2017 [annexed as Annexure 3 to the appeal] and argued that from the Circular dated 16.10.2008, which was relied by the Commissioner, it is clear that the CENVAT Credit can be taken only on the inputs/capital goods which are used in registered premises where actual manufacturing takes place and not on capital goods/inputs at any other station. The copy of the Circular dated 16.10.2008 is placed for perusal. 17. Mr. Keyal has, therefore, submitted that there is no force in this appeal and as such, the substantial question of law framed in this appeal is liable to be answered in the negative. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hifted the machinery to their another Unit namely Mother Roll Plant which was situated 500 mts away from the registered unit and that at the time of removal of capital goods, they neither obtained permission nor reversed the credit of duty taken on the said capital goods. The department reversed the credit amount of Rs. 87,976/-. The claim made by the respondent assessee for refund of the said amount was on the ground that the capital goods installed in their Mother Roll Plant was eligible for the credit of duty inasmuch as the said plant process the goods of the registered factory. The original authority rejected the claim by holding that 57Q (1) stipulated that the capital goods should be installed in the place of manufacture of final products and not in the place outside the place of manufacture of final products. The Commissioner affirmed the order of the original authority. The respondent approached the Tribunal and the Tribunal by impugned order dated 15.10.2004 allowed the appeal and directed for refund to be sanctioned. Before passing the impugned order, the Tribunal called for the report of the Commissionerate. The Tribunal, after noting the findings contained in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.T.R. 318 (Tribunal) Pooja Forge Ltd. v. Commissioner of Central Excise, Faridabad, wherein the Tribunal, in the circumstances, has taken a similar view in tune with the vies of the order of the Tribunal impugned in this appeal. 6. Going by the above finding of the Tribunal, we are also convinced that there was no violation of Rule 57Q (1) of the Central Excise Rules, Rule 57Q (1) reads as under: "(1) The provisions of this section shall apply to goods (hereafter in this section, referred to as the "final products") described in the corresponding entry in column (2) of the said Table, used in the factory of the manufacturer of final products." 7. There is no dispute that the capital goods involved hereunder is one of the capital goods falling within the schedule to the Central Excise Tariff Act and used for the manufacture of the final products. Therefore, the only other question to be examined is whether the respondent has satisfactorily established the condition namely that the said capital goods were used in the factory for the manufacture of final products. The salient points noted in the report establishes beyond doubt that except the fact that the capital goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an gas to Oil India) 3. Naptha unloading facilities at Tinsukia Gaon (Railway siding is set up to upload Naptha (input) for Main Lepetkata Plant." (Emphasis Supplied) 25. Now we examine the Circular dated 16.10.2008, relied upon by the counsel for the Revenue, Mr. Keyal as well as by the Commissioner. It is apposite to quote the relevant portion of the Circular dated 16.10.2008: "Circular No.875/13/2008-CX dated 16.10.2008 Issue pertaining to CNG manufacturers Representations were received from manufacturers of Compressed Natural Gas (CNG) as well as filed formations requesting for single registration facility, and clarification on the availability of CENVAT credit, etc. These issues have been examined and the decision taken in this regard are discussed below. ............................ 3. Availability of CENVAT credit:- In the case of CNG manufacturers, central excise registration is to be given only in respect of those premises, where CNG is actually manufactured i.e. where compressor is stalled to convert natural gas into CNG. Registration is not to be given for premises where CNG is merely dispensed (commonly known as daughter stations) after being transport ..... X X X X Extracts X X X X X X X X Extracts X X X X
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