TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1680
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....The respondent was using inputs in the nature of M.S. Plates, M.S. Channels, Joists, etc. for erection of Coal Hoppers, Ducting for Bag Filter, Conveyor Belt, Duct for Colling, Venting & Exhaust Charge air for D.G. set for Coal Bunker, Coal Feeding to boiler - TPP, Chute, etc. It is not disputed that the items such as Coal Hoppers, Ducting for Bag Filter, Conveyor Belt, Duct for Colling, Venting & Exhaust Charge air for D.G. set are essential parts of the factory where cement is manufactured. 3. The Assessing Authority issued notices to the assessee for different periods asking the assessee to show cause why the Cenvat credit obtained by the assessee in respect of these items be not reversed. Reply to these notices was filed. The Assessing Authority held that the assessee had wrongly claimed Cenvat credit facility. 4. Aggrieved by this order of this Assessing Authority, the assessee filed an appeal before Commissioner (Appeals), Raipur-I. The Commissioner (Appeals), after dealing with the entire law on the subject, held as follows : "9. I have carefully gone through the facts of the case and the submissions as well as the case laws and the previous decisions on re....
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....sp;xxxx 13. If one reckons the functional usage as submitted by the appellant and referred to at Para 4(i) supra, the appellant have used the inputs for manufacture of capital goods including Captive Thermal Power Plant, which were in turn used in the factory for the manufacture of dutiable final products within the definition of capital goods under Rule 2 of the Cenvat Credit Rules, 2002 on the analogy that such capital goods including parts thereof (collectively referred to as capital goods) installed within the factory of production and their use in the manufacture of dutiable final products become an integral part of the machine/machinery classifiable under the respective headings of machinery items. 14. From the nature of the goods and their contribution to the various processes leading to the manufacture of Clinker and Cement, I find that they are part and parcel of the plant. Plants are combinations of a large number of machineries, which are interconnected, and act in unison. Big plants have different varieties of machineries, incidental or ancillary implements, functional areas, supporting structures which contribute to the productive process, which individuall....
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....hout these parts being constructed. Therefore, the inputs used in the manufacture of these parts of the capital goods qualify for Cenvat credit. 6. The main argument raised is that the user test as laid down in the case of Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III, 2009 (240) E.L.T. 641 has not been dealt with. We do not agree with the submission made by the appellant in this behalf. In Para 13, the Commissioner has specifically dealt with the functional usage of the various parts. User test as laid down in the Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III (supra) only provides that the authority should be satisfied that the use of these inputs is necessary for erection of the whole or part of the plant and machinery, which is essential for manufacture of the end product. 7. We, at this stage, may refer to Rule 2(g) of the Rules of 2002, which reads as follows : "2(g) "input" means all goods, except (light diesel oil) high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, an....
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....xpedient must be regarded as goods intended for use "in the manufacture of goods". xxxx  xxxx  xxxx  xxxx  xxxx 17. The aforesaid process squarely meets the test laid down by this court in M/s. J.K. Cotton Spinning & Weaving Mills Co. Ltd.'s case. It is clear that the railway tracks are installed not only within the plant, but the main objective and purpose for which the capital expenditure on laying these railway tracks is incurred by the appellant is for transporting hot metal in ladle placed on ladle car from blast furnace to pig casting machine through ladle car where hot metal is poured into pig casting machine for manufacture of pig iron. It is clear from the above that the use of railway tracks inside the plant not only form the process of manufacturing, but it is inseparable and integral part of the said process inasmuch as without the aforesaid activity for which railway tracks are used, there cannot be manufacturing of pig iron." 9. In the above case, the issue before the Supreme Court was whether a railway track constructed to carry coal from the coal mines to the thermal plant would fall within the definition of input....