2017 (1) TMI 21

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....thority vide the impugned order held that the respondents are eligible for credit of Rs. 11,34,96,803/- and disallowed Cenvat credit of Rs. 19,71,016/-. He also imposed a penalty of Rs. 50,000/- on the respondent under Rule 15 of Cenvat Credit Rules, 2004. Aggrieved by this order, the Revenue is in appeal before us. 2. The main grounds of appeal filed by the Revenue are :- (a) steel items like HR sheets, plates, flats, angles, beams, channels etc. are not inputs for the manufacture of Sponge iron or steel billet. These items having used in the factory in fabrication of support structures or for fabricating object like beams, arouses, columns, girders etc. which do not come under the category of capital goods. These fabricated items were embedded with the earth and as such cannot be called capital goods ; (b) credit of capital goods is available only in respect of items which are specified under Rule 2 (a) of Cenvat Credit Rules, 2004. The various MS items can neither be called as capital goods nor as inputs ; (c) The reliance placed by the Original Authority on various case laws is misplaced. The decision of the Hon ble Supreme Court in the case of Raj....

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....considered by the Original Authority. The Original Authority had also examined various illustrative drawings and photographs of the fabricated capital goods and also considered the certificate given by M/s Mecon Limited who were involved as project consultant for setting up of steel plant of the respondent. 6. We note that the Revenue s contention that these items upon fabrication become immovable in character and, hence, cannot be considered as capital goods as also been examined by the Original Authority. It was held by the Original Authority relying on the decision of the Tribunal in P.G. Foils Ltd. vs. CCE, Jaipur reported in 2000 (116) E.L.T. 105 (Tribunal) to the effect that embedding of machine on concrete foundation to ensure wobble free operations does not make them immovable property. Reference was also made to the decision of the Tribunal in Bellary Steel & Alloys Ltd. vs. CCE, Belgaum reported in 2005 (180) E.L.T. 92 (Tri. Bang.) and in CCE, Hyderabad vs. Nava Bharat Ferro Alloys Ltd. reported in 2004 (166) E.L.T. 72 (Tri. Bang.). 7. We also note that the availability of credit of various MS items used in the fabrication of steel structures which form part of oper....

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....tiable fixal products. are specifically 92,950 The lubricants and greases cligible for credit under the definition of inputs under Rule 2k) covers "hating oils, greases, cuffing oils, coolants". the The department is extending credit lubricants and greases to the Noticee in normal and (Amocam/ Crease Mak Diamond Lubricants and 94,353 Grouses (Castrol Lubricant Lubricants and 12,772 course. Greases (Baltnerol Spraylube Lubricant) Water Chemicals Treatment (Caustic 65,141 Soda Water Treatment Chemicals Water Chemicals Acid) Water Treatment 49,082 Hydrochloric Ack) Treatment (Boric Chcinicals (Water Treatment compound Water Treatment Chenesis Nalcool The water treatment chemicals are specifically eligible for credit under the definition of inputs 11,179 under Rule 2(k) under the category of goods used in relation to manufacture of final products. The treated water is used in for generation of steam in 62,946 boiler or for other purposes that are integrally connected with the manufacture of dutiable final products.....

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....755 (Side fumming) Steel Billet Inputs 1,16,973 (Aluminiums Wire Rod / Shot Steel Billet Inputs 15,408 (Magna Floc) Item Rails and Rail Fittings Foundation Bolts and Nuts Wire Rope Power Saw Pedestal Fan / DP 455 Box Type CAPITAL GOODS Excise Duty Rs. 9.79,944 Submissions of the Noticee These are used as parts/ components of cranes & stacker re-claimer falling under heading 8426.11 and 34.28 respectively. These goods are eligible for credit under the category of parts of cligible capital goods. Credit was extended on these goods by Ld. Commissioner of Central Excise for the earlier periori vide Order-in-Original dated 11.10.2005. 5,22.177 These goods were used as part of the eligible capital goods namely Kiln, Conveyor, Boiler falling under heading 84.17, 84.31 &. 84.02 respectively and thus, are eligible for credit under the category of parts of eligible capital goods. Credit was extended on these goods by Ld. Commissioner of Central Excise for the carlier period vide Order-in-Original dated 11.10.2005. 32,197 These goods we....

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.... These goods were used as parts of eligible 7,402 capital goods namely Kiln falling under Heading 8417.90 and thus are eligible for credit under the category of parts & eligible capital goods. 23,033 Credit was extended on the parts of Kiln by Ld. Commissioner of Central Excise for the cartier Page 20 of 65 Document 5 O-I-O No. CCE/BBSR-II/No. 03 - COMMISSIONER/2006 DT. 17.05.2006 183 Parts/components of Kiln (Anchor with cap) Parts/components of Kiln (Henry William) Parts/components of Kiln (Sluice Gate) Parts/components of Power Plant (Sub- station Material) Parts/components of power plant (Strips/Cable Tray) Paris/components of Power Plant (Copper Strip) Parts/components of Power plant (Cable Tray) Parts/components of Power plant (Cables/Cables connector/conductors! Parts/component Power Plant (Cables Terminal End/Pad) Paris/ components of Material Handling Equipment (Chain and parts/condenser springs) Parts/ components of Material Handling Equipament (Hercules Hoist Clain Pulley) Chemicals (Nepolj dated 2,72,282 Commissioner of Central E....