TaxTMI 
TaxTMI 
2006 (12) TMI 410
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.... 2. The Commissioner (Appeals) relied upon the decision of the Tribunal in Simbhaoli Sugar Mills Ltd. v. CCE, reported in 2001 (135) E.L.T. 1239 (Tri.-Delhi), in which it was held that if the items were used in the construction of the wall or any part of the plant structure as construction material, that part should be disallowed. However, if the same material is used for raising structure to support various machines parts, then they will be covered by explanation to Rule 57Q. 3. As per the show cause notices, during the period between 2003 and October 2003, the noticee had wrongly taken and utilized credit of central excise duty paid by them at 16% on receipt/purchase of CTD bars, angle, channel, MS bar, joist and shapes and s....
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....onclusion that the goods falling under Chapter 72 could not be said to be essential parts of the machinery of the assessee, namely, furnace and electric crane, because both the machines were complete and could work without these goods. It was held that the parts of steel supporting structures were fabricated to support the furnace or electric crane and were embedded in the earth and as such steel supports were non-excisable being permanently embedded in the earth. It was, therefore, held that the steel supporting material could not be considered as part of any machinery or equipment, but was only the building material, as held by the Tribunal in the case of Malvika Steels Ltd. v. Commissioner of Central Excise, reported in 1998 (97) E.L.T. ....
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....ll be covered by the explanation to Rule 57Q. Plant, no doubt, has wide connotation and covers machine, machinery, equipment, parts, accessories and components, but also the permanent structure in the form of walls etc. Both in Simbhaoli Sugar Mills Ltd. (supra) and Malvika Steel Ltd. the Tribunal was concerned with the definition of "capital goods" under Rule 57Q, which included plant as well as components of plant. The definition of "capital goods" given in the explanation to Rule 57Q(1) in paragraph 5 of the judgment in Malvika Steel Ltd. (supra), reads as under :- "57Q(1)..................................... Explanation- For the purpose of this section, -(1) 'capital goods' means- (a) machines, machinery, plant, equipment,....
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.... spare parts and accessories of plants" which were used in the erstwhile Rule 57Q, are kept out of consideration, in view of their being deliberately omitted in Rule 2(b) from the definition of "capital goods" then there would be no scope for considering the CTD bars, angles etc. falling under Chapter 72, as the components, spares or accessories of EOT crane or furnace because both these machines were complete and self-contained). 8. It is significant to note that the word "plant" was omitted from the explanation defining "capital goods" in Rule 57Q(1) by the substituted explanation, which was brought into force from 23-7-1996. It will also be noted, that in Rule 2(b) of the CENVAT Credit Rules defining "capital goods', which applie....