2015 (10) TMI 1838

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.... Adjudicating Authority by disallowing Cenvat Credit under Rule 14 of the Cenvat Credit Rules 2004 alongwith interest. An equivalent amount of penalty under Rule 15(2) of the Cenvat Credit of 2004 read with under Section 11AC of the Finance Act 1944 has also been imposed upon the appellant. 2. Shri N K Tiwari, Consultant, appearing on behalf of the appellant argued that the issue involved is with respect to taking of Cenvat Credit on items like MS Angles, Channels, Beams and Plates. It was his case that these items are not used in the construction of support structures for the capital goods but are used in the repairs of the capital goods as components or as functional attachments. Learned Consultant made the Bench go through the list of....

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....dmissibility of Cenvat Credit on items like MS Angles, Channels, etc. in the factory premises of the appellant. It is the claim of the appellant that these items are not used in making Supporting Structures for the capital goods. It is also the argument of the appellant that these items are used as inputs for repair of vessels and also used in making accessories for functional necessities of the capital goods. Learned Authorised Representative has relied upon the case laws of Birla Corporation Ltd Vs CCE, Jaipur (supra). It is observed that this case law in Para 3.1 and 4 it was upheld that Cenvat Credit with respect to MS Plates, Beams, Angles, Channels etc used for repairs and maintenance of capital goods is admissible as Cenvat Credit. P....

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.... the fabrication of chimney are capital goods as contemplated by Rule 57Q as the chimney is not only an accessory but also an integral part of the diesel generating set in the light of the Pollution Control laws mandating that all plants emitting effluents should be equipped with apparatus to reduce or get rid of effluent gases. We are afraid that this decision would assist the appellants in support of the contention canvassed. In this instant case, the Court was considering whether steel plates and M.S. Channels used in fabrication of chimney for diesel generating sets are entitled to avail of MODVAT credit by treating them as capital goods in terms of Rule 57Q of the Central Excise Rules. This Court, applying 'user test', has arrived at a....

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....l while allowing the MODVAT credit found that these items, except MS sections and shapes, used for raising structure to support the various machines, parts of machineries of the plant would be covered by the explanation to Rule 57Q as a capital goods. The Tribunal referred to its own decision in Malvika Steel Limited's case [1998 (97) E.L.T. 530 (Tribunal)] and without semblance of any discussion, has partly allowed the assessee's appeal. In view of our findings and the conclusion in the earlier part of the judgment, we cannot agree with the reasoning of the Tribunal." 5. In view of the above settled proposition of law, items like MS Plates, Beams, Channels, Angles etc., when used in the repair of the capital goods would be eligible for ....