TaxTMI 
TaxTMI 
2016 (12) TMI 391
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.... on 'Fabricated Steel Base Plate / Base Rails' under the category of capital goods which according to the department was not admissible. A show cause notice was issued alleging irregular availment of credit on the ground that the subject items('Fabricated Steel Base/ Plate Base Rails) did not fall within the definition of capital goods and proposing to recover the credit availed to the tune of Rs. 30,59,396/- along with interest and also proposing to impose equal amount of penalty. 2. After due process of law, the original authority confirmed the demand along with interest and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the demand, however reduced the penalty to Rs. 15,29,698/-. Hence this ap....
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....Tri- Mum). 4. On behalf of the department the Ld. AR Sh. Arun Kumar reiterated the findings in the impugned order. He submitted that the subject items do not fall under the category of capital goods. The classification shown in the invoice is 7308.9010. With regard to the contention that subject items are components /accessories of capital good he drew attention to the discussion in the impugned order which states as 'the impugned items in the instant case cannot be classified as a spare/ part/ accessory of the rolling mill as claimed by the appellant since by their own admission , base plates provide mobility track for convenience to operate in conjunction with other machines, and cannot be treated as sine qua non for its essential ....
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....e is attached to these base plates again by nuts and bolts. 3. By virtue of their usage in relation to the machines in process, they are components or accessories of these machinery. The goods are used not to erect the machinery. The civil foundation beneath the machine foundation gives it the structural support. These plates are affixed to civil foundation by way of nuts and bolts and the machine is placed on these plates. The plates which are also called rails enable movement of machine to align it with other machinery to which it is connected. 6. The case of the department is that these are not capital goods but are support structures and hence credit is not admissible. In the case of Rajasthan Spinning Mills Ltd. (supra) the Hon&#....
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....e fabricated / manufactured according to specific design and drawing for specific requirement and on which various machines/machinery of the plant are installed for achieving required rigidity and vibration free function. These Base Frames are not performing any individual function as a machine and machinery but they are essentially required to be installed along with machines and machinery for the beneficial enjoyment. No heavy machine / machinery can be installed without base frames. Therefore in my opinion, all these frames are essential 'accessory' of that machine with which it is installed. The third group is consist of chimney and flue duct. Chimney is used for emission of fumes and gases and flue duct is used for holding transferring....
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....e appellant used the term base plate only. During the hearing, the Ld.counsel for the appellant admitted that they have sold the bare pump also to some of the customers and it was explained by him that some customer may not be needing the base frame as they may be installing as per their own requirement. From the above facts it is clear that the base frame is not an integral part of the pump but is a accessory which helps in efficient functioning of the pump. " " As discussed earlier the base frame is not an integral part of the pump, it is only an accessories to the pump. Even the appellant sells the pump without base frame, as also with base frame. Whenever he is selling along with base frame, its price is separately charged. Keeping i....