TaxTMI 
TaxTMI 
2020 (3) TMI 834
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....y confirmed the demand, interest and imposed penalty. Aggrieved by such order, the appellant is now before this Tribunal. 2. On behalf of the appellant, Ld.Counsel Ms. Vishnu Priya appeared and argued the matter. She explained the details of the credit availed on each items as under : (a) WELDING RODS: The learned Adjudicating Authority ought to have seen that the welding rods clearly fell within the definition of "Input" as found in Rule 2(k) of the Cenvat Credit Rules (hereinafter referred to as the "Credit Rules"). The aforesaid definition was found in the widest terms and included goods used in or in relation to manufacture of the final product. The welding rods are necessary to weld and put together various columns which were necessary tor setting of the vessels and which are integral part of production. The explanation 2 to rule 2(k) included goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. (b) PIPES: The steel pipes were used to withstand high temperature and pressure of handling fluids, juice, syrup, steam and hot water. The pipes were used at the post crushing stage. The pipes were necessary to carry out ho....
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.... vessels, etc to ensure the leak proof flow of fluids inside the above materials. (h) STRUCTURAL MATERIAL: The structural material of the evaporator and the juice heaters are not supporting structures of capital goods. They are used to provide platforms, which are necessary to access the capital goods. (i) SS WELDING TUBES: The SS Welding tubes are made of stainless steel. The stainless steel is chosen as a material, due to its higher rate of heat transferring characteristics and it can withstand high temperature and pressure. The heating of juice has to be done using the stainless vessels and stainless steel is useful in transferring the heat to the juice which is inside the stainless tube. The heating is an important operation, since it helps to remove the water content in the juice, so that syrup can be obtained in turn moved to the pan section where crystals are formed. (j) STRUCTURAL FOR BATCH CENTRIFUGAL MACHINE: These are machines which help to separate the sugar crystals from the molasses which is found in the massecutes. The Centrifugal machine is large and may be to a height of 3 meters. It has a big diameter of 1.5 to 2.00 meters. So this centrifugal machine ....
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....ed alleging that the MS items have been used as support structure of capital goods and for laying foundation. On perusal of the records, as well as hearing the submissions put forward by both sides, we do not find that these items have been used as support structure for capital goods. In paragraph-2 the ld. Counsel has explained as to the purposes for which MS items were used. Apart from a bald allegation in the SCN that these items are used as support structures, department has not put forward any cogent evidence to show that these are support structures for particular item of capital goods. As rightly pointed out by Ld. A.R there is no restriction with regard to use of these items prior to 7.7.2009. Even after 7.7.2009, the restriction applies only to their use for laying foundation or as support structures for capital goods. As these items have not been used as support structures or for laying foundation, we find that the disallowance of credit is unjustified. Similar issue was discussed by the Tribunal in the case of CCE Meerut Vs Bajaj Hindustan Ltd. (supra). Almost all the items which have been disputed in the present case have come up for consideration of the Tribunal which ....
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.... determining the eligibility of an item for Cenvat credit, what is relevant is as to whether the activity in which that item is required has nexus with manufacture or in other words without that item the manufacturing, though theoretically possible, is not commercially feasible. Repair and maintenance, in my view is an activity without which though manufacturing activity may be theoretically possible, the same would not be commercially feasible. The question as to whether repair and maintenance is an activity distinct and separate from manufacture has nothing to do with the question as to whether repair and maintenance has nexus with manufacture. Looked at from criteria prescribed by the Apex court in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs. Sales tax Officer, Kanpur (supra), the activity of repair and maintenance has to be treated as having nexus with manufacture and hence any item used for repair and maintenance would be eligible for Cenvat credit. 7. Having considered the rival contentions we hold that the appellant have constructed/fabricated machinery and its support structures, accordingly they are entitled to Cenvat credit on the goods in question i....