TaxTMI 
TaxTMI 
2024 (2) TMI 1563
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....llage Putholi District Chittorgarh (Rajasthan) to assail the Order in Appeal No. 164- CRM-CE-JDR-2020 Dated 18/03/2020 wherein Cenvat Credit was denied on components /spares/ accessories used in the manufacture of captive power plant. Appeal Numbers Cenvat Credit involved (Rs.) Period involved Credit denied on E/50838/2020 29,45,241.00 October 2013 to March 2014 Captive power plant E/50839/2020 42,44,601.00 April, 2007 to Sept, 2007 Captive power plant E/50840/2020 38,17,824.00 April, 2013 to Sept., 2013 Captive power plant E/50841/2020 20,96,403.00 Oct. 2007. To March, 2008 Captive power plant E/50842/2020 35,86,060.00 Oct., 2012 to March, 2013 Captive power plant E/50843/2020 24,60,490.00 Oct., 2009 to March, 2010 Captive power plant E/50844/2020 48,39,822.00 Oct., 2015 to June, 2017 Captive power plant E/50845/2020 9,68,778.00 Oct., 2014 to March, 2015 Captive power plant E/50846/2020 38,83,993.00 Oct., 2010 to March, 2011 Captive power plant E/50847/2020 43,37,935.00 April, 2012 to Sept., 2012 Captive power plant E/50848/2020 23,54,685.00 ....
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.... 2,58,48,240.00 December 2003 to February 2004 Captive power plant E/51648/2022 4,37,60,820.00 April 2004 Captive power plant EXCISE APPEAL NOs. 51663-51667 & 51671-51672/2022 These appeals have been filed by the appellant having their unit at Zawar Mines Distt. Udaipur (Rajasthan) to assail the Order-in-Original No. UDZ-EXCUS-000-COM-040-047-2021-22 dated 31/03/2022 wherein Cenvat Credit was denied on components /spares/ accessories used in the manufacture of captive power plant. Appeal Numbers Cenvat Credit involved (Rs.) Period involved Credit denied on E/51663/2022 11,05,25,483.00 April, 2008 - December, 2008 Captive power plant E/51664/2022 13,093.00 October, 2009 - May, 2010 Captive power plant E/51665/2022 5,28,305.00 November, 2011 - July, 2012 Captive power plant E/51666/2022 7,31,62,081.00 September, 2007 - March, 2008 Captive power plant E/51667/2022 3,01,48,560.00 January,2009 - September, 2009 Captive power plant E/51671/2022 14,67,279.00 April, 2012 & August 2012 to March, 2013 Captive power plant E/51672/2022 1,87,41,388.00 April, 2007 - Au....
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....he light of the definition, the appellant satisfies the conditions of the Rule and is eligible for the credit. The learned counsel relied on the following decisions: (i) Commissioner of Central Excise Vs Nava Bharat Ferro Alloys [2004 (166) ELT 72 (Tri-Bang)] (ii) United Phosphorus Limited vs Commissioner of Central Excise [2002 (150) ELT 650 (Tri-Mumbai)] (iii) Lloyds Metals & Engineers Ltd vs commissioner of Central Excise [2002 (150) ELT 638 (Tri-Mum)] The learned counsel contended that the extended period is not invokable as per the understanding of the appellant. CENVAT credit was eligible and no information regarding taking of such credit was required to be submitted by them in the prescribed returns. Further, there is no provision in the law for giving any intimation about availing such credit. The fact of taking such credit was clearly reflected in the documents and records maintained by the appellants. There is no positive corroborative evidence that the appellant has wilfully suppressed this from the department. Consequently, once there is no mensrea, penalty equal to the demand cannot be imposed. 4. Learned Counsel for the appellant has s....
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....se A of the definition. Also, goods which are components, spares or accessories to the capital goods or pollution control equipment need not fall under Chapters 84, 85 or 90 of the First Schedule to the Central Excise Tariff Act, 1985. This is clear from the definition of capital goods under Rule 2(a)(A) of the Credit Rules which provides the specified goods to qualify as capital goods when "used in the factory of the manufacturer of final product". 7. The Learned Counsel also stated that Rule 3(1) of the Credit Rules, entitles a manufacturer of final product to take Cenvat credit of excise duty "paid on (i) any input or capital goods received in the factory of manufacture of final product". In the present case, there is no dispute that the components/parts of CPP were received at the factory premises, under duty paid invoices, issued in the name of appellants. Further, CPPs have admittedly been manufactured out of such parts/ spares/ components which further facilitated the production of electricity being used in the manufacture of dutiable final product i.e., of Zinc and lead. Therefore, the Cenvat credit cannot be denied to the Appellant. 8. While reiterating the findings ....
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....hich was in the name of the appellant. Admittedly, the CPP/KPTA plant was manufactured out of such parts/spares/components and such plant was used in the manufacture of the dutiable final product. There is no dispute that machineries/components received at the factory of the appellant on which the credit has been availed are indeed capital goods in terms of Rule 2(a) of the CENVAT Credit Rules, 2004 as is evident from the fact that the credit arrangement has been restricted in the impugned show cause notice to 50% in each year. We note that the Tribunal in several earlier decisions has held that the prerequisite for availment of CENVAT credit in respect of capital goods in the factory of manufacturer is its receipt in the factory and use in the manufacture of dutiable final product. The Tribunal in a similar factual matrix in the case of Gujarat Ambuja Cements Vs. Commissioner of Central Excise [2001(130)ELT 129(Tri Del)], held as follows:- "7. We see force in the plea have carefully considered the rival submissions. regarding applicability of Rule 57-T(7) to the present case. This Rule states that 'the Assistant Commissioner may, on sufficient cause being shown to him, al....
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....t credit on parts, components and accessories of DG sets in terms of the provisions of Rule 57-T(7) of the Central Excise Rules, we do not deem it necessary to pronounce upon the other submissions of the appellants. 9. In the result, we set aside the impugned order and allow the appeal" This decision of the Tribunal was upheld by the Himachal Pradesh High Court [2010(256)ELT 356(HP)]. It would be pertinent to reproduce the relevant para: "5. Both the arguments raised are without any merit. There can be no dispute that Excise has been paid on some of the company of the DGPP. Since the DGPP is exempt from payment of Excise duty but credit can be claimed by the manufacturer of the DGPP, in the present case WDIL. However, there is no dispute this this DGPP is part and parcel of the factory of the appellant. It is definitely a capital good and therefore rule 57Q is applicable. Rule 57Q enables a party to claim credit of duty paid on capital goods by the manufacturer of specified goods. Under serial No. five with table of the said rule, a manufacturer is entitled to claim what but credit on account of the Excise duty paid on the components, spares and accessories of ....
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....say that "capital goods acquired by a manufacturer for use in his factory are eligible to Modvat credit." 6. The manufacturer, in each case, acquired the components of the generating set, not for use in the manufacture of the generating set as a final product, but to generate electricity required for the manufacture of tyre cord and other such goods, which are their final product. It would therefore not be correct to say that the components were used exclusively in the manufacture of the generating set. It would be more appropriate to say that these components were put together into a generating set for the manufacture of tyre cord and other final product. The explanation that the departmental representative tendered, if accepted, would in effect result in denying Modvat credit contrary to the provisions of law, in a very large number of cases. The definition of capital goods in the Table to Rule 57Q, includes components, spares and accessories of various machines, machinery, apparatus, appliances etc. specified therein. Every time any manufacture brings in a component to replace a damaged or worn out component in any of the machinery in its factory, it could be argued tha....