2017 (8) TMI 1272

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....l items such as Chequered Plate, G.P. Sheet, H.R. Plate, G.P. Coil cut into sheet, H.R. Sheet, Cobble Plate etc. and on welding electrodes. Show Cause Notice dated 30.03.2013 was issued on the ground that the same are not covered under the definition of Rule 2(k) of the Cenvat Credit Rules, 2004. The adjudicating authority disallowed the Cenvat Credit of Rs. 16,49,057/- and ordered for recovery of the same along with interest and imposed equal penalty under Rule 15(2) of Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944. On appeal the Commissioner(Appeals) set aside the adjudication order and allowed the appeal filed by the assessee. Hence Revenue is in appeal before the Tribunal. 2. The ld.AR appearing on be....

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.... various iron and steel items used for the manufacturing of the capital goods, in turn used for manufacturing of Sponge Iron. I have perused the impugned order which allowed the credit on these items. The usage of these items in various capital goods/parts and components of such capital goods fabricated inside the plant of the respondent, has been examined by the lower appellate authority. He also examined the factual application of these iron and steel items as certified by the chartered engineer. I have examined the submissions of the Revenue which contested these findings. As already recorded, the main thrust of the argument of the Revenue is that the iron and steel items like angles, sheets, plates etc. were mainly used in the support s....

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....hile Rule 57Q are also relevant. The Hon'ble Supreme Court in Jayaswal Neco Limited -2015 (319) ELT 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) ELT 92 (Tri. Bang.)=2005-TIOL-290-CESTAT-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 usd. The Hon'ble Punjab & Haryana High Court in CCE, Jullandhar Vs. pioneer Agro Extracts Ltd. 2....

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....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. 07.07.2009. 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 structural s, they would not be eligible for the credit, considering the amendment made w.e.f. 07.07.2009 as a clarification amendment and hence to ....

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....ly supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of Capital Goods includes, components, spares and accessories of such capital goods. Accordingly, applying the user Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2 (a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit." 7. I also rely on decision of Hon'ble Madras High Court in ....