2015 (11) TMI 711 - AT - Central Excise

Availment of cenvat credit - inputs such as OPC cement, MS plates, MS beam, MS Angle, MS channels, MS sheets, M.S. Flat, TMT Rod and TOR Rod which are used for the construction of their Dry Process Cement Manufacturing Plant - immovable property - Capital goods - Held that - On an identical issue of the same appellant, this Tribunal in two different appeals had already allowed the appeals and the Revenue preferred C.M.As. against the Tribunal s order. The Hon ble Madras High Court in both the orders in the case of CCE Trichy Vs India Cements Ltd. 2013 (1) TMI 5 - Madras High Court , and CCE & Service Tax Vs India Cements Ltd. - 2014 (7) TMI 881 - MADRAS HIGH COURT had dismissed the Revenue s appeals - Madras High Court by relying their own order reported in 2014 (7) TMI 881 - MADRAS HIGH COURT again dismissed the C.M.A. filed by Revenue and upheld the Tribunal s order. The Hon ble High Court in a recent decision reported in 2015 (3) TMI 661 - MADRAS HIGH COURT on an identical issue had allowed the C.M.A. filed by the very same appellant. - immovability is not a criteria for denial of cenvat credit, we hold that appellants are eligible for cenvat credit on the capital goods used in Dry Process Cement Manufacturing Plant . Accordingly, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Denial of cenvat credit on capital goods used in the construction of a cement plant.
- Interpretation of the term "plant" as "capital goods" under Cenvat Credit Rules.

Analysis:
1. The appeal was filed against the order of the Commissioner of Central Excise, Salem, denying cenvat credit on various items used in the construction of a "Dry Process Cement Manufacturing Plant." The appellant contended that the items were used as capital goods for setting up the plant and not for civil construction. The adjudicating authority confirmed a demand for wrongly availed credit and imposed a penalty under CCR 2004.

2. The appellant argued that the term "plant" should be considered as "capital goods" based on previous judgments in their favor. They cited cases where the Hon'ble High Court of Madras upheld Tribunal orders allowing cenvat credit on similar items used for manufacturing plants. The appellant emphasized that immovability should not be a criterion for denying cenvat credit, relying on relevant legal precedents.

3. The Revenue contended that the goods were used in the construction of the cement plant, which does not fall under the definition of "capital goods." However, the Tribunal noted that similar appeals by the appellant had been allowed in the past, and the Revenue's appeals were dismissed by the Hon'ble Madras High Court. The Tribunal highlighted the High Court's findings that supported the appellant's claim regarding the eligibility of cenvat credit on the items used in plant construction.

4. After considering the arguments and previous legal decisions, the Tribunal held that the appellant was eligible for cenvat credit on the capital goods used in the cement plant construction. Citing the consistent rulings of the Hon'ble High Court and maintaining its own precedent, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that immovability should not be a determining factor for denying cenvat credit.