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of <h1>CESTAT upholds capital goods credit eligibility for construction in Cement Mill.</h1> <h3>COMMISSIONER OF C. EX., TIRUNELVELI Versus INDIA CEMENTS LTD.</h3> The Appellate Tribunal CESTAT, CHENNAI dismissed the Revenue's appeals challenging the eligibility of capital goods credit on items used in the ... Cenvat/Modvat - Capital goods Issues:1. Eligibility of capital goods credit on items used in the construction of a new Cement Mill.2. Eligibility of capital goods credit on items used as components of supporting structure for installation of equipment in the plant.Analysis:Issue 1: The first issue revolves around the eligibility of capital goods credit on items used in the construction of a new Cement Mill. The respondents, being manufacturers of cement, utilized various materials like CTD bars/rods, M.S. Angle, M.S. Plate, M.S. Channels, DDR steel rods, etc., for this purpose during August - December 1995. The lower appellate authority allowed the credit, which was challenged by the Revenue through Appeal No. 514/04. However, upon examination of the facts and submissions, the Member (J) found no grounds to interfere with the decision of the learned Commissioner (Appeals). The appellant admitted the usage of these items in the construction of the cement mill, and it was established that these were parts/components of the cement-manufacturing plant. The capital goods in question were recognized as eligible under the relevant rule, and the lower appellate authority's decision to allow the credit was supported by case law. Consequently, the appeal was dismissed.Issue 2: The second issue concerns the eligibility of capital goods credit on items used as components of the supporting structure for the installation of equipment in the plant. In 1996, the respondents expanded their manufacturing activity and used items like Channel supporter, Cement, and Ceramic pipes as components of the supporting structure during April - June. The Commissioner (Appeals) allowed the capital goods credit on these items, leading to the Revenue filing Appeal No. 517/04. After reviewing the records and arguments from both parties, the Member (J) again found no reason to interfere with the decision of the lower appellate authority. The appellant admitted the usage of Channel supporter, Cement, and Ceramic pipes as parts/components of the supporting structure for equipment installation in the cement mill. These items were deemed eligible capital goods under the relevant rule during the material period, and the lower appellate authority's decision to grant the credit was deemed appropriate and supported by legal precedents. Consequently, the appeals were dismissed.In conclusion, both appeals by the Revenue challenging the eligibility of capital goods credit on items used in the construction of a new Cement Mill and as components of the supporting structure for equipment installation were dismissed by the Appellate Tribunal CESTAT, CHENNAI.
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