TaxTMI 
TaxTMI 
2017 (3) TMI 1084
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....ant was not the manufacturer of capital goods. The contractor who executed the work is the manufacturer ; (b) an amount of Rs. 33,77,73,662/- availed as credit on capital goods was sought to be denied on the ground that the appellant could not have taken the credit on these capital goods as they have not commenced production at the relevant time ; (c) an amount of Rs. 15,32,12,449/- availed as credit on input services for construction of factory was sought to be denied on the ground that the construction is with reference to immovable property and accordingly the credit is not available. 2. The Original Authority on adjudication confirmed the denial of Cenvat credit of Rs. 55,01,01,964/. He also imposed penalty of equivalent amount under Rule 15 of Cenvat Credit Rules, 2004. 3. The learned Counsel for the appellant contested the findings in the impugned order on the following grounds :- (i) denial of credit on goods used in the fabrication of plant and machinery was sought to be made originally, as per show cause notice, on the ground that it is the contractor who is the manufacturer and not the appellant. However, the impugned order accepted the fact that the appellant ....
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....n input services, the learned Counsel submitted that the reliance placed by the Original Authority on the decision of the Tribunal in Vandana Global Ltd. (supra) is not appropriate. The definition of "input service" in the Cenvat Credit Rules is broad and the same is extended to include services in relation to setting up, modernization, renovation or repairs of a factory. Reliance was placed on certain decided cases, which are dealt with later in this order. 4. The learned AR supported the findings in the impugned order. He stated that the credit availed in respect of supporting structures and foundation created by using various steel items is not correct. The resultant items are immovable assets and cannot be categorized as capital goods. No credit can be allowed in respect of immovable assets for creation of which the duty paid iron and steel items were used. 5. We have heard both the sides and perused the appeal records. On the first issue regarding credit availed on goods used for fabrication of plant and machinery we note that the show cause notice proposed denial of credit only on the ground that the manufacturer of the capital goods were actually the contractors and not th....
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....es associated with capital goods have been subject of various decisions by the Tribunal. In Singhal Enterprises Pvt. Ltd. vs. CC & CE, Raipur reported in 2016 (341) E.L.T. 372 (Tri. - Del.) the Tribunal found as below :- "13. Now we turn to the question, whether credit is admissible on various structural steel items, such as, MS Angles, Sections, Channels, TMT Bar, etc., which have been used by the appellants in the fabrication of support structures on which various capital goods are placed? The same stands denied by the lower authority. The learned DR has sought disallowance of the same by citing the decision of the Larger Bench in the case of Vandana Global Ltd. (supra) and other judgments. Further, he has brought to our notice and emphasized the amendment carried out in Explanation-II to Rule 2(a) which defines the term "Input" w.e.f. 7-7-2009. It has further been pleaded that the Cenvat credit claimed for the period prior to this will be covered within the decision of the Larger Bench in the case of Vandana Global Ltd. (supra). 14. The Larger Bench decision in Vandana Global Ltd.'s case (supra) laid down that even if the iron and articles were used as supporting structures, t....
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.... find that apart from the various other case laws relied upon by the appellant as above, the decisions of Hon'ble Madras High Court in India Cements Limited - 2012 (285) E.L.T. 341 (Mad.), 2014 (310) E.L.T. 636 (Mad.) and 2014 (305) E.L.T. 558 (Mad.) all on the same set of facts, though with reference to erstwhile Rule 57Q are also relevant. The Hon'ble Supreme Court in Jayaswal Neco Limited - 2015 (319) E.L.T. 247 (SC) allowed Cenvat credit on railway track materials used for handling raw material processed goods. The Tribunal in Bellary Steel and Alloys Limited vs. CCE, Belgaum - 2005 (180) E.L.T. 92 (Tri. - Bang.) held that Cenvat credit is available on HR sheet, angles, channels etc. used in fabrication and erection of technological structure and blast furnace and material handling system. Such supporting structure are also capital goods and the fact that they are embedded to earth is no reason for denying credit/ credit on input used. The Hon'ble Punjab & Haryana High Court in CCE, Jullandhar vs. Pioneer Agro Extracts Ltd.- 2008 (230) E.L.T. 597 (P&H) held that channels and angles, joint of iron steel used for installation of batch vessel or essential plant and machinery and a....
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....cessarily has to keep account of all the duty paid capital goods alongwith quantum of eligible credit on such capital goods. It is not the case of the Revenue that the appellants have utilized any of the credit availed on this capital goods before the commencement of production. It is clear that such utilization is possible only when dutiable final products are manufactured and cleared by the appellant. Hence, keeping a record of all the credits available will necessarily help both the Revenue and the appellant for proper accounting and verification of such credit. Regarding the observation recorded by the Original Authority on the immovability of the capital goods, we find that duty paid capital goods have been received in the premises of the appellant. The capital goods are to be installed in a manner for effective use in the production process. The capital goods as they were received by the appellant were duty paid and the credit on the same cannot be denied on the ground that they were embedded to earth after installation. The excisability of capital goods is not a point for decision. There is no irregular utilization of credit by the appellant and no such allegation has been m....