TaxTMI 
TaxTMI 
2022 (6) TMI 4
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....12 April 2009 to Sept. 2009 23.04.2010 14.05.2012 28,07,247 28,07,247 2.1 The appellant is engaged in the manufacture of cement in their factory at Chandrapur. For the storage of raw materials, the appellant manufactured/erected/installed silos (special storage tanks) for manufacture of cement and iron and steel items against which they have taken the credit. 2.3 Revenue initiated proceedings for denial of the credit so availed by issuance of show cause notices as indicated in the table above and for imposition of penalties on the appellant. These show cause notices have been adjudicated by the original authority and two appeals against these orders have been dismissed by the Commissioner (Appeals) as per the impugned orders. Hence these appeals. 3.1 We have heard Shri Rajesh Ostwal, Advocate, for the appellant and Shri Sydney D'Silva, Additional Commissioner and Shri N.N. Prabhudesai, Superintendent, Authorised Representatives for the Revenue. 3.2 Arguing for the appellant, learned counsel submits that:- • The various issues involved in the present case have been decided by various authorities and hence the issue is no longer res integr....
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.... (280) ELT 176 (Kar.)] • Doodhganga Krishna Sahakari Sakhare Karkhane Niyamit [2013 (297) ELT 361 (Kar.)]. Hence he prays that the appeals be decided in appellant's favour. 3.3 Arguing for the Revenue, learned ARs submit that:- • The storage tank/silos manufactured by the appellant are immovable properties as have been held by various authorities that for being goods, the same should be movable and immovable property attached to earth is not goods. These silos are not movable. Hence the processes undertaken on them cannot be said to be processes of manufacture. • The definition of capital goods specifically covers storage tanks and hence the credit in respect of storage tank is eligible as capital goods only, i.e. if it is goods first immovable property. Immovable property cannot be goods and hence cannot be capital goods. • They would rely upon the following decisions in their support:- • Bharti Airtel Ltd. [2014 (35) STR 865 (Bom.)] • Kailash Oil Cake Industries [1993 (63) ELT 693 (Tribunal)] • Hyderabad Race Club [1996 (88) ELT 633 (SC)] • TTG Industries [2004 (167....
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....upreme Court evolved 'user test' to answer the question whether the items falls within the purview of 'capital goods' and held that in the case of Rajasthan Spinning Mills (supra) that steel plates and MS channels used in the fabrication of chimney would fall within the ambit of 'capital goods'. The Hon'ble Karnataka High Court in the case of SLR Steels Ltd. [2012 (280) ELT 176 (Kar.)] held as under : "7. A perusal of the aforesaid provision makes it very clear though storage tanks may be immovable property and the pollution control equipment are included within the definition of "capital goods'', input as defined in Rule 2(k) makes it clear that "input'' includes in goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. Therefore, the input is not necessarily to be used in the manufacture of final product. By virtue of explanation 2 - goods used in the manufacture of capital goods which are further used in the factory of the manufacturer also falls within the definition of input. In 2009, this explanation has been amended to the following effect : "but shall not include cement, angles, channels Centrally Twister ....
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....ellant are entitled to CENVAT credit on the items in question." 4.3 Further we note that the decision of Hon'ble Bombay High Court in Bharti Airtel Ltd. [2014 (35) STR 865 (Bom.) has been considered by the Tribunal again in the case of the appellant, vide final order No. A/85122-85124/2022 dated 21.02.2022 and in paras 5, 6 & 9, the Tribunal has observed as follows:- "5.According to Learned Authorized Representative, the stand of the first appellate authority that 'silos' are not goods but 'immovable property' is vindicated by the decision of the Hon'ble High Court of Bombay in Bharti Airtel Ltd v. Commissioner of Central Excise, Pune - III [2014 (35) STR 865 (Bom)] which enunciated the statutory framework thus '21. A plain reading of the definition of 'capital goods' as defined under Rule 2(a)(A) of the Credit Rules show that all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, Heading No. 6805, grinding wheels and the like, and parts thereof falling under Heading 6804 of the First Schedule to the Central Excise Tariff Act; pollution control equipments; components, spares and accessories of the goods specified at sub-clauses (i) and (ii) whi....
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....f this judgment on the resolution of the present dispute as the Hon'ble High Court of Bombay has merely distinguished the applicability of the said judgement, and others cited by the appellant therein, without invalidating the eligibility of CENVAT credit on facts similar to the present dispute before us. 6. Further reliance is placed on the Larger Bench decision of the Tribunal in Tower Vision India Pvt Ltd v. Commissioner of Central Excise (Adj.), Delhi [2016 (42) STR 249 (Tri.-LB)] which followed that of the Hon'ble High Court of Bombay in re Bharti Airtel Ltd. Furthermore, he states that the alteration of the Explanation in rule 2(k) of CENVAT Credit Rules, 2004 has been elaborated at length in Green Valley Industries Ltd v. Commissioner of Central Excise, Shillong [2020 (11) TMI 540 - CESTAT KOLKATA] to conclude that '8. We find that the usage of various iron and steels items is to be analysed in light of the decision of the Hon'ble Supreme Court in the case of Rajasthan Spinning & Weaving Mills Ltd. reported as 2010 (255) ELT 481 (SC). In this judgement, the Hon'ble Supreme Court has referred to the 'user test' outlined in the case of CCEx., Coimbatore Vs. J....
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....s not restricted only to the components, spares and accessories falling under Chapters 82, 84, 85 or 90 but covers all components, spares and accessories of the specified goods irrespective of their classification. The same was the position prior to amendment in Rule 57Q (i.e. prior to 23-7-1996) when credit was available on components, spares and accessories of the specified capital goods irrespective of their classification. 4. Accordingly, it is clarified that all parts, components, accessories, which are to be used with capital goods of clauses (a) to (c) of Explanation (1) of Rule 57Q and classifiable under any chapter heading are eligible for availment of Mod vat credit." 9. It is all too clear that, under rule 3 of CENVAT Credit Rules, 2004, duty paid on 'inputs' deployed for installation of certain 'capital goods', as enumerated in rule 2(a) of the CENVAT Credit Rules, 2004, are entitled to be availed as credit and that erection of such 'capital goods' within the factory of assessee obtains the same treatment. The single point that arises therefrom is whether 'silos' are 'storage tanks' within the meaning of rule 2(a) of CENVAT Credit Rules,....
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....lants are engaged in the manufacture of cement. The appellants set up a cement packing plant at Cochin during the period November 2008 to March 2009. For setting up of the cement packing plant, the appellants received various inputs as well as taxable input services which are used in the manufacture of capital goods. The appellants availed 50% credit of capital goods such as bag filter, belt, conveyor, anti-vibration body, power and motor control centre etc. The appellants availed credit in respect of the inputs such as steel items used in the manufacture of capital goods which are further used for manufacture of excisable goods. The input services which are received in or in relation to manufacture of final product cleared on payment of duty was also availed. Credit has been denied on the ground that the plant is immovable property and not excisable hence the credit in respect of the items in question is not available to the appellants in view of the decision of the Larger Bench of the Tribunal in the case of Vandana Global Ltd. vs. CCE, Raipur reported in 2010 (253) ELT 440. "7.We find that in this case, credit in respect of the ....
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....er requires reconsideration by the adjudicating authority. The impugned order is set aside and the matter is remanded to the adjudicating authority for de novo adjudication and the adjudicating authority will decide afresh after affording an opportunity of hearing to the appellants." 4.5 However, we find that the decision of Larger Bench of the Tribunal relied in this decision has been set aside by Hon'ble Chhattisgarh High Court in the case of Vandana Global Ltd. [2018 (16) GSTL 462 (Chhattisgarh) wherein in paras 4, 5 & 6 the Hon'ble High Court has held as under:- "4. In the light of the contents of the impugned order of the Tribunal and submissions of the assessee and the Revenue following substantial questions of law are formulated for consideration : (A) Whether the terms 'capital goods' excludes the structures embedded to earth? (B) Whether the goods like angles, joists, beams, bars, plates, which go into fabrication of such structures are not to be treated as 'input' used in relation to their final products as inputs for capital goods, or none of the above? (C) Is the amendment brought in CENVAT Credit Rules, 2004 as per Rule 2 of the C....