2018 (7) TMI 669

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..... Beam, M.S.Channel etc.. Show Cause Notice dated 23.03.2012 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. 14,06,836/- 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.DR appearing on behalf of the appellant Revenue reiterates the grounds of appeal. 3. The ld.Consultant appearing on behalf of the r....

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....these iron and steel items as certified by Mr. Sarat Behra who was engaged in the manufacture of the capital goods. As already recorded, the main thrust of the argument of the Revenue is that the iron and steel items were mainly used in the support structure and will not satisfy the criteria of parts and components or accessories of such machinery. I find that such observation has to be supported by material facts. The same is not available in the present appeal. Further, it is to be noted that whether iron and steel item is to be considered as part or component or accessory of capital goods can be decided by applying "user test" as decided in Jawahar Mills Ltd. (supra) and elaborated in CCE Vs. Rajasthan Spinning & Weaving Mills Ltd. repor....

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....tructure 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. - 2008 (230) ELT 597 (P&H) held that channels and angles, joint of iron steel used for installation of batch vessel or essential plant and machinery and are eligible for credit as capital goods. The Hon'ble Madras High Court in Thuru Arroran sugar- 2015- TIOL-1734-HC-Mad.CX held that credit on M.S. Plates, angles, channels utilized in construction/erection of plant were eligible for credit. The High Court observed that the principle laid-down by the Hon'ble Supreme Court in Rajasthan Spinning and Weaving Mills Lt....

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....ion 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 be considered retrospectively. However, we find that the said decision of the Larger Bench was considered by the Hon'ble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd. - 2015 (04) LCXO 197, wherein it was observed that the amendment made on 07.07.2009 cannot be held to be clarificatory and as such would be applicable only prospectively. 15. We find that the controversy can be laid to rest by making a reference to the decision of the Apex Court....