TaxTMI 
TaxTMI 
2009 (1) TMI 251
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.... the process of such expansion and development, the appellants were procuring capital goods both imported and indigenous and availing Cenvat credit of the duty paid on said capital goods. It was noticed by the lower authorities, on scrutiny of the ER1s that the appellant had taken credit on certain ineligible items falling under Chapters 72 and 73. It was also noticed that at the plant expansion site, the goods were utilized in the expansion of the plant is for the construction of civil structures and to support the Boiler and other machinery for manufacture of pulp. On coming to a conclusion that the appellant has availed ineligible Cenvat credit on the items which are basically used for civil structures, a show cause notice was issued to the appellant directing them to show cause as to why: (a) An amount of Rs. 90,16,221/- (CENVAT) and Rs. 1,80,325/- (Education Cess) as detailed in the Annexure, being the CENVAT Credit wrongly taken on the ineligible items/goods should not be recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A and Section 93 of the Finance Act, 2004; (b) Interest at the appropriate rate should not be paid by them under R....
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.... Rules, 2004 for wrong availment of Cenvat credit on ineligible capital goods. 4. The learned Counsel appearing on behalf of the appellant would draw our attention to the photographs produced by the appellant before the Adjudicating Authority. He would specifically draw our attention to the photographs wherein the appellant has used the items in dispute, for the proposition that these items are supporting structures of the plant which manufactures Paper and Paper Board. He would also draw our attention to page No. 44 in the appeal memorandum and submits that the items which were used by the appellant for construction activities, they have not availed Cenvat credit. It is his submission that the issue is now squarely covered by the decision of the Tribunal in the case of Divi's Laboratories Ltd. v. CCE, Visakhapatnam - 2006 (196) E.L.T. 285, Jindal Vijaynnagar Steels Ltd. v. CCE, Belgaum - 2005 (191) E.L.T. 459, Bhushan Steel & Strips Ltd. - 2008 (223) E.L.T. 517 (Tri.-Bom.) and Aditya Cement v. Union of India - 2008 (221) E.L.T. 362 (Raj.). 5. Learned SDR on the other hand, supports the adjudication order on the ground that the appellant has not been able to prove the correla....
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....res for supporting the machinery and the Adjudicating Authority in the impugned order comes to a conclusion that there is no evidence. Be that as it may, we find that this Bench of the Tribunal in the case of Divi's Laboratories Ltd. v. CCE, Visakhapatnam (cited supra) at paragraph 5 held as under: 5. We have gone through the records of the case carefully. The items like angles, channels, beams, pipes, MS tubes, plane plates, flats, cable trays, SS sheets are used as part of a technological structures which support a reaction vessel or used in particular equipment in the manufacture of Bulk Drugs. From the photographs shown by the learned Advocate during the hearing, we are convinced that the above items are used as parts of technological structures. The learned Commissioner in his order had not taken into consideration the decisions cited by the appellants on the ground that they are not relevant in terms of Rule 2 of the Cenvat Credit Rules, 2002. A careful study of the Modvat/Cenvat provisions right from its inception in 1986 reveals a very gradual trend of liberalized interpretation. In dismissing the case laws cited by the appellants, the Commissioner is trying to put the c....
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....TAT), it has been held that operating platforms are integral to the plant. Hence, they are capital goods. Hence we feel that the items at Sl. No. 6, are also entitled for Modvat credit as capital goods. As regards the items at Sl.. No. 7, Transformer, in the case of Manikgarh Cement v. CCE - 2001 (136) E.L.T. 1085, the Tribunal has held that Transformers are 'Capital Goods'. By following ratio of the Jawahar Mills case, we allow Modvat credit for the items at Sl.. No. 8, Spring Hanger Supports, Cable Tray Assembly, etc. As regards items at Sl. No. 9, Refractory Cement, Tundish Relining Stand, Oil Tank Units, Filter Cooling Pumps, MSB Distribution Board, Position Indicator, Ladle Tuner Parts, etc., Modvat credit was disallowed on the ground that the declaration under Rule 57T was not field. In the case of JBM Tools Ltd. v. CCE -2002 (144) E.L.T. 561 (Tribunal), it has been held that the Modvat credit cannot be denied merely for non-filing of declaration where there is no dispute on the receipt of duty paid inputs/capital goods. There are other decisions also to support of the appellants. Hence we allow Modvat credit for these items. As regards item at Sl. No. 10, HR Steels Cut Coils....
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....dit when Commissioner allows credit on other structural items holding them to be component parts of capital goods. 9. It is also seen that all the above decisions squarely cover the issue in favour of the appellant. We find that this issue was agitated before the Hon'ble High Court of Rajasthan in the case of Aditya Cement (cited supra), wherein their lordship held as under: 11. We are of the opinion that answer to this question is no more res integra. The Hon'ble Supreme Court in its decision in Commissioner of Central Excise, Coimbatore v. Jawahar Mills Ltd. 2001 (132) E.L.T. 3 (S.C.) page 3, while considering the definition of capital goods under Rule 57Q even after its amendment said: "4. The aforesaid definition of 'Capital goods' is very wide. Capital goods can be machines, machinery, plant equipments, apparatus, tools or appliances. Any of these goods if used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product would be 'Capital goods', and, therefore, qualify for availing Modvat credit. Per clause (b), the components, spare parts and accessories of the goods mentioned in clause (a) used for ....