TaxTMI 
TaxTMI 
2012 (6) TMI 696
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....s. ACC Ltd., are manufacturers of Cement and Clinker falling under Chapter 25 of the Central Excise Tariff Act, 1985. Scrutiny of the records revealed that they availed CENVAT credit amounting to Rs.61,44,464/- in respect of steel items such as MS Plates, angles, channels, beams etc. used in the construction of storage tanks/silo and chimney which are in the nature of immovable property. A show-cause notice was issued to the appellant proposing to deny CENVAT credit on the steel items used in the manufacture of immovable property and also proposing to demand interest thereon and imposing penalties. The notice was adjudicated vide the impugned order and the learned adjudicating authority confirmed the demand for Rs.61,44,464/- towards inelig....
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....e Hon'ble Apex Court in the case Commissioner of Customs, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. - 2010 (255) ELT 481 (S.C in support of their contention and accordingly prays that the demand be stayed. 4. The learned Superintendent (A.R.) appearing for the Revenue on the other hand, contends that CENVAT credit can be taken on 'inputs' and 'capital goods' and also on inputs used in the manufacture of capital goods. In the case under consideration, the inputs such as iron and steel items and structures, etc. have been used for the construction of civil structure which are immovable properties. Therefore, they do not come under the purview of capital goods as defined in the CENVAT Credit Rules. 4.1 In support of his contenti....
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.... (1) in the factory of the manufacture of the final products, but does not include any equipment Or (2) for providing output service 5.1 As per the definition, the items listed therein have to be goods first. "Goods" by definition are items which can come to the market for being bought and sold and they have to be movable in nature. Chimneys of power plants and storage silos are immovable properties and are not goods. Therefore, though storage tanks have been specified under capital goods, only such storage tanks which are 'goods' can fall within the definition of capital goods. If the storage tanks are immovable property, they cannot come under the definition of capital goods. 5.3 This issue relating to eligibility to CENVAT ....
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....t the foundation and supporting structures are neither machinery items, nor components, spares and accessories of machineries, nor have they been listed for special inclusion in the definition. Some arguments have been advanced that the supporting structures should be considered as parts and accessories of the machinery. Parts which include components parts and spare parts and accessories have specific connotation in the context of the Customs and Excise Tariff Schedules in terms of which the supporting structures cannot be classified either as part or as accessory. A component part is required to complete a machinery and is, therefore, integral to its manufacture and function. A spare part is used to replace a worn out or damaged component....
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....s goods. Therefore, the steel items which have gone into manufacture cannot be treated as 'input' for manufacture of capital goods. 5.4 In the case of Saraswati Sugar Mills (supra) a question arose whether iron and steel items used in the fabrication of support structure for installation of equipment can be considered as component part of capital goods used in the sugar manufacturing plant and hence eligible for MODVAT credit under rule 57Q of the erstwhile Central Excise Rules, 1944. The Hon'ble Apex Court, in that case, held that the iron and steel structure are not essential requirements in the sugar manufacturing unit and they would not come into the composition vacuum pans, crystallizers etc. and, therefore, such structures do not s....