AI Drafter 
TaxTMI 
TaxTMI 
2016 (10) TMI 479
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....iler, coal handling mill, rolling mils inter alia submitted as follows: (i) The appellant manufactures iron and steel products falling under Chapters 72 and 73 of the First Schedule to the Central Excise Tariff Act, 1985; (ii) The appellant is using iron and steel items namely angles, channels etc. for manufacture of structures supporting capital goods like boiler, coal handling mills; (iii) The appellant availed cenvat credit based on detailed records maintained in respect of quantity of iron & steel products like angles, channels, beams etc. used in various projects in the factory; and copies of certificates issued by Chartered Accountant and Chartered Engineer were enclosed with the appeal. (iv) In respect of the quantity of the items used in civil or other ineligible activity, cenvat credit was not availed. (v) Cenvat credit was not availed also on quantity of steel used in foundation for erection and installation of various equipments and capital goods. 3.1 The learned Advocate in respect of issue of denial of benefit of Notification No.67/95-CE submitted as follows: (i) The duty has been demanded on angles, channels, beams manufactured and captively consu....
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....gned items have been used for fabrication of various parts / components of specified capital goods, their eligibility for credit is to be decided at the stage before they become part of immovable goods and subsequent use with capital goods which are embedded to earth would be of no consequence. Applying the said ratio, credit taken in the present case is sustainable. (vii) Even though the word plant was omitted from definition of capital goods, since goods like furnace, conveyor, generator, compressor, etc., are specified goods falling under Chapter 82, 84 and 85 of Central Excise Tariff, credit availed on the impugned iron and steel items for fabricating their parts, components and accessories would be eligible for credit. (viii) It is reiterated that credit on the impugned items is available as inputs since they were used in the manufacture of capital goods i.e. parts of specified capital goods which were further used in the factory. Alternatively, credit will be admissible as capital goods under the category of components, spares and accessories of specified capital goods. (C) The appellant also relied on the following decisions: * JayaswalNeco Ltd. v. CCE, 201....
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.... demand is not correct as submitted in the Appeal Memorandum and substantial duty demand is hit by time bar. Since detailed records were maintained and credit availed is as per law, no penalty is imposable and no interest is recoverable. 5. The Revenue has been represented by Authorised Representative, Shri R.K. Manjhi, who reiterated the findings of the Commissioner, given in the impugned order dated 16.10.2008. 5.1 The learned D.R., Shri Manjhi further inter alia submitted that as follows: (i) The appellant is contesting the impugned order on merits and limitation. (ii) Appellant is not eligible for cenvat credit on structural items on the basis of findings of adjudicating authority. (iii) The reliance is placed on the following decisions: * Vandana Global Ltd. vs. C.C.E., Raipur 2010 (253) ELT 440 (Tri-LB). * Daya Sugar vs. C.C.E., Meerut I 2015 (316) ELT 394 (All.) * Dwarikesh Sugar Industries Ltd. vs. C.C.E., Meerut 2016 (334) ELT 58 (All.) * Bharti Airtell Ltd. vs.C.C.E., Pune III 2014 (35) STR 865 (Bom.) * Tower Vision India Pvt. Ltd. vs.C.C.E. Rohtak 2016 TIOL 639 (CESTAT Del.-LB. * Commissioner of Customs....
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....y of the manufacturer; For the present facts, it is necessary to consider the definition of input along with Explanation 2. Here in the definition of input , all the goods (except the exclusions given) are included if they are used in or in relation to the manufacture of final product or for any purpose used in the factory of production. Further, Explanation 2 to Rule 2(k) makes it clear that input would include all such goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. In other words, if certain inputs have been used within the factory of production for manufacturing capital goods and if the said capital goods are further used in the said factory, such goods would rightly be called as input within the definition of Rule 2(k) of Cenvat Credit Rules, 2004. The wordings of the above definition/meaning make it clear that if goods are covered as input under the said definition and used in manufacture of final products or in manufacture of capital goods, considering the Explanation 2, the cenvat credit would be admissible, if the other conditions , if any, of eligibility of cenvat credit are fulfilled in their case. 8. ....
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....lly operational (for further use in manufacture of final products in a factory), supporting structures fabricated/erected for installation of capital goods like boilers etc. are must and, therefore, are to be clubbed with and, kept in the category of capital goods or they be in the category of accessory to capital goods. It is justified that one should have discriminating view regarding eligibility of cenvat credit for steel items etc. used for fabrication and manufacture of various structures of plant and machineries including supporting structures for the capital goods. But when said structures are specifically meant to make the capital goods like boilers, coal handling mills etc. fully operational and when the said boilers etc. are integral part of the manufacturing operations of steel plant (factory), where iron and steel products are manufactured, one cannot say that subject steel items (structural steels like angles, channels, beams, plates etc.) are not cenvatable items in case of the said steel manufacturing plant /factory. 8.2.2 We emphasise that one cannot be oblivious to the basic requirements of making any machinery or engineering goods fully usable/operational. For ....
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....ioner of Central Excise, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.). In paragraphs 12 and 13, while applying the user test and following the Jawahar Mills s case, the Apex Court has held that even though steel plates and M.S. Channels used in the fabrication of chimney would fall within the ambit of capital goods ." 8.4 Further in the case of of C.C.E., Tiruchirapalli vs. India Cements Ltd. 2014 (305) ELT 558 (Mad.), the assessee was held to be entitled to the claim of modvat credit in the case of structural steel items like M S plates, angles, channels and HR sheets used for civil construction activity. The Hon ble Madras High Court, in the above case has again quoted the Hon ble Supreme Court s decision in the case of C.C.E., Jaipur vs. Rajasthan Spinning & Weaving Mills - 2010 (255) ELT 481 (SC). The Hon ble Supreme Court in the said case sustained the CESTAT order holding that steel plates and MS channel used in the fabrication of chimney for diesel generating set (by treating these items as capital goods) are admissible items for cenvat credit. For the present facts also on the issue of admissibility of cenvat credit on the subject structural steel items, we use the....
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....(c) need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer. Thus, it can be seen that the language used in the explanation is very liberal." Further, the Hon ble Supreme Court in the case of Rajasthan Spinning & Weaving Mills (supra), inter alia observed as under: "12. Inter alia observing that capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances if any of these goods is used for producing or processing of any goods or for bringing about any change in the substance for the manufacture of final product, although this view was expressed in the light of the afore-noted definition of capital goods in the said Rule, which is not there in Rule 57Q, as applicable in the instant case, yet the user test evolved in the judgment, which is required to be satisfied to find out whether or not particular goods could be said to be capital goods, would apply on all fours to the facts of the present case....