TaxTMI 
TaxTMI 
2007 (12) TMI 49
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....r dated 29-4-2005, allowing credit of 2,06,81,846/- and denying credit of Rs. 156,85,011/- as detailed below Allowed CHN RS. 1. Angles channels joists, beams, plates, sheets, coils, flats, strips, rails, foundation bolts, hex bolts and nuts 72 15939256 2. MS structure 7216 522638 3. Tubes, pipes & fittings. 73 1408506 4. Goods used as paint 3208 200639 5. Lubricating oils 2710 204669 6. Electricity transmission structure 7308 632995 7. Aluminium wires/cables for electricity transmission 7614 540054 8. Welding electrodes/welding 8311 545517 Wires 9. Hydraulic_loader & spares 8429 362031 .10. Hydra 10 (mobile crane 8426 54400 11. Other miscellaneous items 271137 20681846 Disallowed 1. CTD_bars_(tor steel)_& other bars 72 7151538 2. Cement! shrinkomp cement 25/38 4059916 ....
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....where the Cold Rolling, Galvanizing, Colour Coating, Pickling work are going on. In the absence of the required temperature of steam and coolants, furnaces temperatures shall not be maintained if kept open, for providing cover to colour coating and galvanizing plant where the process requires dust free environment and con trolled temperature for various process involved in the making of finished goods, for constructing supporting structures for machine, machinery, plant and mills, etc. in the factory, various plant processes require chilled water, coolants, steam, hydraulic oils, which are supplied through pipelines all over the plant at required temperature. (iv) Excavator & Spares - Credit on the same has been disallowed on the ground these are used before starting of production. Even though these are used before production for other activities these are now used for movement of steel from one Mill to other Mill where EOT cranes are not available. (v) Tipper & Spares - Credit has been denied on these items as these are used before starting of production in other activities. These tippers are use....
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....ng the foundation of EOT Cranes, Power Plant, Rolling mills, Galvanising Line, Pickling Line and other machinery and equipments as well as in trenches, tunnels and cellars which are essential for making BOT Cranes power plant, Rolling mills, Galvanising Line. (xviii) GI Earthing Strips - M.S. Flats/G.I. Flats/G.I. Earthing strips are used for earthing purposes for the protection of mills, and other machines in compliance with Electricity laws. (xix) Hot Dip Kal. Flats - same as above (xx) GI Flats - same as above (xxi) SS Sink Accessories - These are accessories for guiding the Sink Rolls of molten zinc bath in rotation, which keep the strip constantly dipped in the molten zinc while the process of coating of Zinc on cold rolled strips is on, and as such integral part of galvanising line. (xxii) Castings - These are mechanical parts used in cold rolling mills, galvanising lines and' other machines and equipments (xxiii) Hook Anchor sheet - These are electro mechanic....
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.... capital goods; the case laws relied upon by the assessee would rot apply as they pertain to erstwhile Rule 57Q. For this purpose, he relies upon the judgments of Tribunal in Usha Ispat Ltd. v. CCE, reported in 2003 (156) E.L.T. 929 (T-Mum), and in CCE, Indore v. L.G. Hotline CPT. Ltd. reported in 2004 (176) E.L.T. 443 (T-Del). 5.2 The Commissioner in para 12.1 of the impugned order allows credit on structural items like angles, channels, beams, joists, rails, sheets, plates, coils, foundation bolts/hex bolts and nuts, holding them to be parts and components of capital goods. Likewise, the Commissioner in para 12.2 of the impugned order allows credit on MS Structures used as supports for machinery in various mills. Therefore, the same reasoning and the factual position considered by Commissioner for allowing credit on the said items would support the appellants' contention of admissibility of credit on cement and CTD/other Bars. 5.3 We find that Cement/steel bars are used in making of foundation for machine, machinery, plant, EOT Crane legs structure etc. all over the various plants situated....
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....5,500 litres per minute) is sprayed in side the mill at high pressure. For this purpose a big coolant reservoir of 8OKL capacity, pumping unit and piping network is required. The coolant has to go back to the reservoir by gravity flow for cleaning and recycling. (b) CR Mill Operating system requires both High & Low Pressure Hydraulic Systems - high pressure Hydraulic System is required for Rolls movement & low pressure Hydraulic System is required for coil cars movement. The hydraulic oil pressure is generated with the help of specially designed & precise hydraulic pumps. The Hydraulic oil has to be collected in reservoirs, installed underneath the mill for filtration and recycling. The reservoirs and other hydraulic equipments are technically required to be installed beneath the mill for operation of the CR mill because of heavy volume of oil to be discharged within few seconds, (c) In Cold Rolling Mill, there are big gear boxes, which are required to be lubricated continuously. For this, a big reservoir, oil filter unit, pumping unit & piping network is technically required to be in stalled, beneath the mil....
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....hat though this situation is hypothetical, yet technically it is not feasible, keeping in view the mill momentum weight which is 500MT Approx, as well as the handling of material at such a height is not only difficult but technically not viable. Hence, in both the options, for operation of the CR Mill, the Cellar is a technical requirement and is an integral part of the operating system of the CR Mill. 5.7 The functioning of the Plant, as above, was seen by the Bench and Advocates/Representatives from both sides, during the plant visit, and that Cellars, trenches and tunnels are found to be technically necessary for a Steel Rolling Mill. We, therefore, hold that credit on cement and steel used therefor is admissible, being in the nature of component of the Plant, as "machine" inter-alia means plant and metal rolling mills are covered under heading 84.55 of first Schedule to CETA and are covered for Cenvat under Rule 2(b)(iii) of CCR, 2001 /2002. 5.8 The other reason for denying the credit on cement and steel bars viz, that the foundation consisting of RCC cannot be dismantled and transpo....
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....in the subsequent judgment dated 13-10-2003 has held that credit on cement is admissible, in the case of Eagle Flask Industries, reported in 2004 (167) E.L.T. 116 (T), (b) The meaning assigned to capital goods under Rule 57Q of CER, 1944, till 23-7-1996 was restricted in view of allowing credit only to machines, plant, etc. used for producing or processing of any goods or for bringing about any change in any substance for manufacture of final products. As against this, under Cenvat Credit Rules, 2001/2002, goods falling under inter-alia Chapters 82, 84, 85 and 90 are treated as capital goods if they are used in the factory of the manufacturer of final products irrespective of whether they are used for manufacturing activity or otherwise. Therefore, the meaning assigned to "capital goods" w.e.f. 23-7-1996 under Rule 57Q(1) and under the present Cenvat credit rules is broader and covers the disputed goods in its ambit. (c) The Larger Bench of Tribunal, even while interpreting the expression employed in 57Q, in vogue prior to 23-7-1996, defining capital goods, has held that it is wi....
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....ial for construction of plant cannot be said to be used as plant in the manufacture of goods so as to qualify under Section 8(3)(b) of the Central Sales Tax Act, 1956, relying upon Paragraph 20 of the Larger Bench decision in Jawahar Mills Ltd. - 1990 (108) E.L.T. 47 for the reason that the Larger Bench had categorically held that the expression employed in Rule 57Q (defining capital goods) is even wider than the expression contained in Section 8(3)(b) of the Central Sales Tax Act. (e) The Apex Court in CIT v. Karnataka Power Corporation [247 ITR 268] has held that power generating station building has to be treated as plant for the purpose of investment allowance as these buildings could not be separated from the machinery and the machinery could not be worked without such special construction. It was further held by Apex Court that generating station building is so constructed as to be integral part of its generating system. Although, the said judgments are under Income Tax law, the ratio thereof would apply to the case on hand as the meaning assigned to "capital goods" under Rule 2(b) of CCR, 2002 is wider than t....
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....ecifications. High pressure air wipers are used to clean the sheet at the time of CR Rolling. Hence, it is essential to provide protective cover on and around the mill area to protect it from exposure to environment. In the atmosphere during various climatic conditions like summer, winter, rainy season, lot of salts, gases & dust particles are present. During night time they settle down along with the dew on the surface of the product, which will create oxides on the surface of the sheets, which is technically not acceptable in finished goods. If any dust or foreign body particle goes to the roll with the sheet under rolling (which is rolled in microns thickness), it would create roll marks on the rolls as well as on the material; therefore Dust free environment is essential. 7.3 The claim of Ld. D.R. that Roofing material may not be a technical requirement as civil work was going on during plant visit gets negated from the fact, as seen, that since civil work in the extension area had started, the manufacturing activity abutting thereto was suspended till completion of such civil work. In a nutshell, a manufacturing line near civil work was ....
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....ectricityTransmittingTower: 10.1 The Dept. is in appeal challenging the correctness of allowing the credit on welding electrodes/welding wires, claiming them to be not in- puts/capital goods on the basis of Tribunal judgment in Triveni Engineering re ported in 2005 (186) E.L.T. 158 (Tri). Credit allowed on aluminum wires/ cable/ conductors & electricity transmitting tower is challenged by Dept. on the ground that the same cannot be called as inputs for generating electricity or steam and transmission line towers are neither machinery nor apparatus. 10.2 We find that welding electrodes/welding wires were used in making of Machine, Machinery, Plant, Supporting Structures, EOT Crane Legs Structure etc. The ratio of Tribunal judgment in Triveni Engineering does not apply, as in the present case welding electrodes were used for producing or processing of components of capital goods and not for repairs or maintenance. Further, invoking explanation 2 to Rule 2(g) of CCR, credit on electrodes would be....