TaxTMI 
TaxTMI 
2013 (9) TMI 615
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.... was engaged in the manufacture of paper and paper board during this period. They used various structural items viz. plates, beams, angles, channels, joists etc. for fabricating structural support to machinery during the said period and took CENVAT credit on such structural items deeming such items to be capital goods falling under Rule 2(a) of the CCR. The original authority, in adjudication of a show-cause notice, ordered for recovery of the CENVAT credit so-taken, demanded interest thereon, imposed a fine of Rs.1 lakh in lieu of confiscation of the so-called capital goods and imposed a penalty of Rs.10,000/- on the party. Aggrieved by the order of the adjudicating authority, the party preferred an appeal to the Commissioner(Appeals) and ....
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....dered is whether the structural items could be considered as capital goods in terms of clause (iii) of Rule 2(a). The Rule, short of irrelevant portions, reads as follows:- RULE 2 Definitions - In these rules, unless the context otherwise requires, - (a) capital goods means :- (A) the following goods, namely :- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, [heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804] of the First Schedule to the Excise Tariff Act; (ii) ............ (iii) Components, spares and accessories of the goods specified at (i) and (ii); (iv) ........ (v) ......... (vi) ........ (vii) ......... used- (1) In the factory of the manufacturer of the f....
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....ssioner Vs. A.P.P. Mills Ltd.). In the cited case, similar structural items were held to be capital goods in view of the Hon'ble Supreme Court's judgment in CCE, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010(255) ELT 481 (SC)]. According to the learned counsel, the apex court's ruling in Rajasthan Spinning & Weaving Mills case is fit to be followed in the instant case. The learned counsel has also endeavoured to distinguish the case of Saraswati Sugar Mills (supra) by submitting that the issue considered by the apex court in the said case was different. In answer to a query from the Bench, the learned counsel, however, concedes that the respondent has never claimed the structural items to be inputs. 7. I have given careful consi....
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....accessories of any of the goods specified in clause (i), they would fall under clause (iii) to be considered as capital goods for the purpose of CENVAT credit. Therefore the question is whether the structural items can be held to be components/spares/ accessories of the machinery (capital goods) for installation of which supporting structures were fabricated from these structural materials. But such supporting structures were held to be not capital goods in the case of Vandana Global Ltd. (supra), wherein it was held that the supporting structures were neither machinery items nor components, spares or accessories of the machinery items. Para 43 of the Larger Bench decision reads thus:- 43. Since the foundation and the supporting structures....
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....res are not essential requirements in the sugar manufacturing unit. Anything required to make the goods a finished item can be described as component parts. Iron and steel structures would not go into the composition of vacuum pans, crystallizers etc. If an article is an element in the composition of another article made out of it, such an article may be described as a component of another article. Thus, structures in question do not satisfy description of components. Therefore, in our opinion, the Tribunal was right in the view it took. 10. From the above judgment, it is easy to decipher the apex court's ruling which is to the effect that a structural support to any capital goods cannot be considered to be a component of such capital goo....