2024 (8) TMI 313

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r 72, 73 & 68. As per Rule 2(a) of the CENVAT Credit Rules, 2004, capital goods are defined as under : - " (a) " capital goods " means : - (A) the following goods, namely : - (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 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); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank, (viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chassis [but including dumpers and tippers],] used - (1) in the factory of the manufacturer of the final products, [ * * * ]; or [(1A) outside the factory of the manufacturer of the final products for generation of electricity [ or for pumping of water] for captive use within the factory ; or ] ( 2 ) for providing output service; " 1.2 According to Depa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rarily holding the raw materials in the process of production and therefore cannot be said to be a storage tank. This view adopted by the Adjudicating Authority is erroneous, for the reason that such storage bunker though for temporarily holding the raw materials is necessary for ensuring continuous flow of raw materials in the process of production. Certain support structures which were used to put up the pollution control system has been denied alleging that these are used to hold the machineries and cannot be termed as parts, accessories of the pollution control system. It is submitted by the Ld. Counsel without such support structures, the pollution control equipment cannot be installed and effectively function. The various levels and alignment of the pollution control system has to be maintained by such support structures. The credit availed in respect of cable tray has been denied by the Original Authority alleging that it is only for holding electric cables. The cable tray is an important item used in a factory of manufacture. Various items in the nature of parts, components, accessories of capital goods were made using the impugned items. The appellant has furnished a Certi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....allegation that the appellant has suppressed facts with intent to evade payment of duty is baseless. The entire figures for raising the demand has been taken from the records maintained by the appellant. Further, the Chartered Engineer has inspected the premises and has given Certificate as to the end use of each invoice on which the appellant has availed credit. The appellant has filed periodical returns reflecting the availment of credit during the disputed period. There is no suppression of facts established by the Department. The issue as to whether such items are eligible for credit has always been under controversy. There were decisions rendered by the Hon'ble Apex Court in the case of Rajasthan Spinning & Weaving Mills Ltd. (supra) and Jawahar Mills Ltd. (supra) wherein the user test has been applied to conclude that if such structural items are used for putting the capital goods into effective use, the credit would be eligible. The issue being interpretational, the extended period cannot be invoked. The Ld. Counsel prayed that the appeal may be allowed. 3.1 The Ld. Authorised Representative Shri M. Selvakumar appeared and argued for the Department. The findings in the im....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... adduced any evidence to discredit this Certificate. Again, thought the credit has been availed under the category of capital goods, it does not prohibit assessee from claiming credit under the category of inputs, if the impugned items fit into the definition of inputs, as held by the Larger Bench in the case of Commissioner of Central Excise Vs. Modi Rubber Ltd. [2000 (119) ELT 197 (LB)]. We now proceed to analyse the eligibility of credit on various items. 6. The Ld. Counsel for the appellant has referred to para 20 of the impugned order in which the Adjudicating Authority has discussed the eligibility of credit on storage bunker. It is held that the storage bunker only temporarily holds raw materials in the process of production and therefore cannot be called as storage tank which falls within the definition of capital goods. The definition of capital goods as reproduced above, includes storage tank. Merely because, the bunker is used for temporarily holding the raw materials, it cannot be said that it does not serve the purpose of storage. We hold that the credit in regard to storage bunker is eligible. 7. Certain items used in the nature of support structure for Bag Filt....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ectrical equipment which in our view is not eligible for credit. For this reason, Sl.No. 50 to 60 in the Annexure to the Chartered Engineer Certificate is not eligible for credit. At Sl.No. 99 relating to invoice No. 21 dated 01.08.2009, the name of capital good is mentioned as 'Earthing Material'. This is also used for electrical protecting wiring and therefore not eligible for credit. Sl.No. 109, in regard to invoice No. 27 dated 09.04.2009 the description is shown as 'Galvanised Structure'. The end use of this item is for electrical equipment in main receiving sub-station. We hold that the said invoice is not eligible for credit. So also, Sl.No. 144-149 are items used for electrical power and main receiving sub-stations. These items are not eligible for credit. At Sl.No. 165-168 are items in the nature of GI earthing wire used for electrical protective earthing which in our view is not eligible for credit. At Sl.No. 173 in regard to invoice dated 30.10.2009, the description of item is 'DCS System Spares' which is used for electrical equipment in main receiving sub-station is not eligible for credit. At Sl.No. 290, it is noted that it is a duplication of Sl.No. 289 and for this r....