TaxTMI 
TaxTMI 
2023 (5) TMI 236
X X X X Extracts X X X X
X X X X Extracts X X X X
....lies within the narrow compass of eligibility to avail credit of duties of central excise that had been discharged by manufacturers of components and parts cleared to the appellant for erection and commissioning of 'capital goods' in the refinery of the appellant at Ambalamugal, Kochi. The central excise authorities alleged that these 'capital goods', for reason of having been embedded into the earth, are immunized from excisability and, hence, beyond the ambit of CENVAT Credit Rules, 2002/2004. Per contra, it is the contention of the appellant that such inference is untenable in the face of acknowledgement of the said goods being, unquestionably, 'capital goods' and, undoubtedly, used in factory of manufacture which are the sole criteria for eligibility to take credit under CENVAT Credit Rules, 2002/2004. In view of these primary submissions, a brief narrative of the facts against the backdrop of the scheme of credit would serve for a better appreciation of the framework within which the dispute may be amenable to resolution. 3. The appellant is an 'oil marketing company (OMC)' with own refining establishments and, in pursuance of upgrading of their facility at Kochi by erection ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ltd vs. Commissioner of Central Excise & Service Tax, Panchkula [2021 (46) GSTL 61 (Tri-Chennai)] and in Commissioner of Central Excise, Raigad vs. JSW Ispat Steel Ltd [2015 (327) ELT 549 (Tri-Mumbai], of the Hon'ble High Court of Bombay in Commissioner of Central Excise, Pune-II vs. Rajaram Bapu Sahakari Sakhar Kharkahana Ltd [2019 (365) ELT 14 (Bom)] and in Commissioner of Central Excise, Nagpur vs. Larsen & Toubro Ltd [2022 (380) ELT 25 (Bom)] and of the Hon'ble High Court of Himachal Pradesh in Commissioner of Central Excise vs. Gujarat Ambuja Cement Ltd [2010 (256) ELT 356 (HP)] in support of the contention of Learned Counsel. He further submitted that subsequent order [order-in-original no. COC-EXCUS-000-COM-09-22/CX dated 25th March 2022] of the jurisdictional Commissioner of Central Tax & Central Excise had, at the adjudication stage itself, dropped identical proceedings initiated for such availment in a later period. 6. Learned Authorized Representative pointed out that the lower authorities had taken cognizance of circular no. 58/1/2002-CX dated 15th January 2002 and further clarification in circular no. 643/34/2002-CX dated 1st July 2002 of Central Boa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r manufacture of excisable goods. Intuitively, eligibility for taking credit of duty liability discharged on these goods received in the factory is not to be denied. There has, again, been no claim by appellant that these are 'inputs' - one of the two eligible categories - within the meaning of rule 2(k) of CENVAT Credit Rules, 2004 but that that these are, uncontestably, within the broadened coverage assigned to '(a) "capital goods" means:- (A) The following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90 of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); in rule 2(a) of CENVAT Credit Rules, 2004. Thus, for availment of credit, 'capital goods' is not limited to the general understanding of the expression but has been deliberately crafted to ensure that the scheme for 'eliminating cascading effect of tax' does not exclude assembly of such equipment at site. The essential principle underlying the scheme is that duty discharged on goods procured for use in the manufacture of excisable goods should be neutralized to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ries of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; and (vii) storage tank, used - (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (2) for providing output service;" Thus, it includes not only goods falling under Chapters 82, 84, 85 and 90, which are machinery, equipment, appliances and also components, spares and accessories of the goods falling under the aforesaid Chapters. In the present case, the plant has been set up using various machinery and equipments falling under Chapter 82, 84, 85 or 90 or components, spares or accessories of these goods and these facts are not disputed. Merely because the various machinery, equipment, appliances and parts have been assembled at the site to set up the Oxygen Plant and such a plant being immovable property, Cenvat credit is sought to be denied. Nowhere in the Cenvat Credit Rules, it is envisaged that the machinery, equipment, appliances or their components should be used as such in the manufacture of excisable goods.....