2010 (7) TMI 354

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....r passed by the Commissioner (Appeals) on 26-10-2005 whereby the order passed by the adjudicating authority disallowed the credit in relation to certain items has been modified in favour of the assessee. The penalty imposed has also been set aside .4. The adjudicating authority by its order dated 15-7-2005 had disallowed Cenvat credit to the tune of Rs. 15,92,582/- on various items to the respondents and had ordered recovery of interest as well as imposed penalty of Rs. 50,000/-. 5. The respondents herein are engaged in manufacture of Billets, MS Rounds, TMT Bars, MS CTD Bars and Waste & Scrap falling under Chapter 72 of the Central Excise Tariff Act, 1985. They were availing benefit of Cenvat credit in terms of Rule 3 of ....

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.... Act, 1985 and that such structural items having fabricated at the site became immovable property. While disallowing the Cenvat credit for the said items the order dated 15-7-2005 came to be passed. 7. In appeal against the said order by the respondents herein, the Commissioner (Appeals) did not agree with all the findings of the adjudicating authority and held that except on CTD bars to the extent the same were used in the construction of civil foundation, all the impugned goods had been used in the manufacture/fabrication of essential components and accessory of the plant and machinery installed in the factory and, therefore, were eligible for availment of credit. 8. While arriving at the said finding the Commissioner (A....

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....here credit has been allowed even though intermediate goods produced are exempt from payment of duty. In this connection we note that as the learned Jt. CDR has rightly submitted, the erstwhile Rules 57D and 57R of the Central Excise Rules, 1944 provided for non-denial of the credit if any intermediate product came into existence during the manufacture of final product. Hence, credit can be allowed if intermediate goods emerge during the process of manufacture of the final product. The immovable capital assets in the form of foundations and structural supports embedded to earth cannot be considered as intermediate goods arising in the process of manufacture of the final product. The precedent decisions cited by the learned counsel do not ad....