TaxTMI 
TaxTMI 
2008 (12) TMI 322
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....ndents are engaged in the manufacture of Sugar Caustic Potash, Sulphuric Acid, etc. which are excisable goods. They are falling under the Cenvat Credit Scheme. The point at issue is that they had availed Cenvat credit to the extent indicated above on cement used in construction of civil foundation as structural support to plant and machinery for the purpose of modernization and expansion of existing chemical plant. The Revenue proceeded against the Respondents denying the Cenvat credit on the cement as it appears not to be falling under the definition of capital goods given in Rule 2 of the Cenvat Credit Rules, 2002/2004. The stand of the Revenue is that the cement is not used either directly or indirectly at any stage in the process of manufacture of any of their products and therefore, it appears that the cement cannot be considered as capital goods. It was also pointed out that the cement cannot be presumed to be as 'input' for the assessees, under the said Cenvat Credit Rules. Consequently, the lower authority demanded Cenvat credit wrongly along with interest and imposed penalty as indicated above. 4. Aggrieved by the order of the Original authority, the Respondents appeale....
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....e Hon'ble Supreme Court has held that erection and installation of plant cannot be held to be excisable goods. The court further commented that if such wide meaning is assigned, it would result in bringing in its ambit, structures, erections and installations which would not be in consonance with the accepted meaning of excisable goods and its excisability to duty. (c) In the case of Union of India v. M/s. Hindustan Zinc Ltd. reported in 2007 (218) E.L.T. 503 (Raj.) the Hon'ble High Court of Rajasthan, Jodhpur has held that "the foundation made of cement does not fall under the category of capital goods as per the definition clause and since the cement was used in the construction of foundation, it cannot be said to be eligible capital goods in terms of Rule 2(b) of Cenvat Credit Rules, 2002 and the cement cannot be said to be 'input' in terms of Explanation II of Rule 2(b) of the said Rules. Since the cement cannot said to be 'input' in terms of Explanation-II of Rule 2(g) of the Rules, 2002. (v) Thus, it follows from these Hon'ble Supreme Court/High Court judgment that the civil foundations, structure etc. would not qualify being a 'Plant' and accordingly items used in thes....
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....ne, machinery and parts thereof used in or in relation to the manufacture of final products fall within the definition of capital goods. The platform constructed to facilitate the installation of the machinery for the production of final product could not be said to be part and parcel of the machinery and held that credit was ineligible. (h) Binani Cements Ltd. v. CCE, Jaipur [2003 (160) E.L.T. 163]. In this case, it has been held that Channel for scanner, column for air duct, column and cross girder are only structural materials which cannot be considered as parts and accessories of any machine producing goods and are ineligible for credit under Rule 57Q. (i) In the case of Commissioner of C. Ex., Indore v. L. G. Hotline CPT Ltd. [2004 (176) E.L.T. 443 (Tri. -Del.)], the Hon'ble Tribunal ordered that foundation work in which cement and TOR Steel are used are nothing but civil construction on which capital goods purchased by respondents are being installed. Civil construction does not become part of capital goods, hence impugned goods are not eligible for capital goods credit. (j) Hon'ble Tribunal (Mumbai) in the case of Usha Ispat Ltd. v. Commissioner of C. Ex., Pune [200....
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....tated that the Tribunal in the case of Bhushan Steel & Strips Ltd. v. CCE [2008 (223) E.L.T. 517 (T-Mum.)] has held that the cement used in the factory for foundation of machine, plant, etc. and in tanks, cellars as well as other structures would be entitled for Cenvat credit as they are support of capital goods/component of plant. In the case of Lloyds Steel Industries Ltd. v. CCE, 2007 (211) E.L.T. 275 (T. - Mum) also it was held that the capital goods would not be usable without supporting structure. In Lloyds Metal & Engineers Ltd. v. CCE, [2008 (226) E.L.T. 599], it was held that steel and cement used in foundation for kiln, cooler and chimney are eligible capital goods. Further reliance was also placed on the decision of the Hon'ble High Court of Rajasthan in the case of Aditya Cement v. UOI [2008 (221) E.L.T. 362 (Raj.)] Wherein it was held that direct involvement with producing or processirig of any goods or for bringing about change in any substance for manufacture of final products with the machines, plant, equipment, apparatus, tools or appliances are not essential condition, if it falls in any of the clauses (b), (c) and (d) of Rule 57Q of erstwhile Central Excise Rules....