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of <h1>Cenvat credit allowed on sugar manufacturing essentials; Revenue appeals dismissed.</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, PUNE-II Versus SHREE GURUDUTT SUGAR LTD.</h3> COMMISSIONER OF CENTRAL EXCISE, PUNE-II Versus SHREE GURUDUTT SUGAR LTD. - 2007 (213) E.L.T. 305 (Tri. - Mumbai), 2007 (78) RLT 566 (CESTAT - Mum.) Issues involved: Admissibility of Cenvat credit on Bagasse Bailing Machine and various structural items like Column & Beams, Structures, M.S. Grating, Brackets, Staircase & ladder.Analysis:1. Bagasse Bailing Machine Cenvat Credit:The Commissioner (Appeals) examined the admissibility of Cenvat credit on the Bagasse Bailing Machine. The department had initially denied the credit, arguing that bagasse is used as fuel and the machine is used to make bales, not for fuel. The Commissioner disagreed, stating that the loose bagasse used as fuel is different from the bagasse bales made by the machine. Referring to a Tribunal decision in SIEL Sugar v. CCE, it was concluded that the Cenvat credit of Rs. 40,944/- on the Bagasse Bailing Machine is admissible.2. Admissibility of Cenvat Credit on Structural Items:Regarding the Cenvat credit on items like Column & Beams, Structures, M.S. Grating, Brackets, Staircase & ladder, the department had denied the credit, claiming these items were not parts/components of goods under specific chapters or pollution control equipment but were structural/constructional materials. However, the Commissioner found that these items were used for supporting and holding the sugar machinery, making them integral to the manufacturing process. Citing a Tribunal decision in Simbhaoli Sugar Mills Ltd. v. CCE, upheld by the Supreme Court, it was established that such items are eligible for credit as capital goods. The Cenvat credit of Rs. 7,13,830/- on these structural items was deemed admissible.3. Revenue's Position and Dismissal of Appeals:The Revenue, represented by the ld. DR, acknowledged that the items in question were recognized as capital goods in the sugar industry. Consequently, the appeals filed by the Revenue were dismissed as lacking merit, affirming the admissibility of Cenvat credit on both the Bagasse Bailing Machine and the structural items.In conclusion, the judgment upheld the admissibility of Cenvat credit on the Bagasse Bailing Machine and various structural items crucial to the sugar manufacturing process, dismissing the Revenue's appeals based on the recognition of these items as capital goods in the industry.
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