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TMI Blog2013 (9) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... an the scope of the term "used in the manufacture". Following Singh Alloys & Steel Ltd. vs. Assistant Collector [1993 (1) TMI 97 - HIGH COURT AT CALCUTTA ] and Grasim Industries Ltd. vs. Union of India 2011 (10) TMI 2 - SUPREME COURT OF INDIA - the "expression - in relation to" in the definition of 'input' had a wide connotation and the definition of input was not dependent in what ought to be used but what was commercially expedient to use and on this basis held that the ramming mass and dolomite mix used for preventing Corrosion of refractory lining of the furnace and sealing the crevices in the refractory walls so as to prevent leakage of molten metal are eligible for Modvat credit. Waiver of Pre-deposit - Prima facie the appellant had a strong prima facie case in their favour and as such the amount of Rs. 10,60,242/- already paid by them prior to adjudication was sufficient for hearing of the appeal - The requirement of pre-deposit of balance amount of Cenvat credit demand, interest and penalty was waived for hearing of the appeal and recovery was stayed till the disposal of the appeal - stay application was allowed. - 2055 of 2011 - - - Dated:- 28-5-2012 - Ajit Bhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al amount was also imposed under Rule 15 (2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act. The Commissioner by this order also ordered appropriation of an amount of Rs. 10,60,242/- already paid by the appellant prior to adjudication. 1.4 Against this order of the Commissioner, this appeal along with stay application has been filed. 2. Heard both the sides in respect of stay application. 3. Shri S.P. Sahu, Advocate, the learned Counsel for the appellant, pleaded that all the disputed items have been used either for repair and maintenance of the various capital goods or for modification of the same, that these items have to be treated as used in or in relation to the manufacture of the final product, that Hon'ble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur reported in 2010 (256) E.L.T. 690 (Chhattisgarh) has held that welding electrodes used for repair and maintenance of the plant and machinery of the cement plant are eligible for Cenvat credit, that the ratio of this judgment of Hon'ble Chhattisgarh High Court is squarely applicable to the facts of this case, that Hon'ble Rajasthan High Court in the case of Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisible to the excise duty, that in view of this judgment of the Apex Court, the items, in question, cannot be treated as inputs used in the manufacture of final product and, hence, would not be eligible for Cenvat credit, that extended period has been correctly invoked for confirming the demand of duty raised by show cause notice dated 6/9/10, as the appellant had suppressed the relevant facts from the department, that the appellant do not have prima facie case and, hence, this is not the case for waiver from the requirement of pre-deposit. 5. We have carefully considered the submissions from both the sides and perused the records. 6. While the items, in question, i.e. MS angles, channels, sections, bars, joists, sheets etc. are, prima facie not covered by the definition of capital goods, under Rule 2 (a) of Cenvat Credit Rules, 2004, the definition of input, as given in Rule 2 (k), covers all goods except light diesel oil, high speed diesel oil and motor spirit commonly known as petrol used "in or in relation to manufacture of final product whether directly or indirectly and whether contained in final product or not". Thus, the term input covers not only the goods which are u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndered and pressed. All these processes would be regarded as integrated processes and included "in the manufacture" of cloth. It would be difficult to regard goods used only in the process of weaving cloth and not goods used in the anterior processes as goods used in the manufacture of cloth. To read the expression "in the manufacture" of cloth in that restricted sense, would rise many anomalies. Raw cotton and machinery for weaving cotton and even vehicles for transporting raw and finished goods would qualify under Rule 13, but not spinning machinery, without which the business cannot be carried on. In our judgment, Rule 13 does not justify the importation of restrictions which are not clearly expressed, nor imperatively intended. Goods used as equipment, as tools, as stores, as spare parts, or as accessories in the manufacture or processing of goods, in mining, and in the generation and distribution of power need not, to qualify for special treatment under Section 8(1), be ingredients or commodities used in the processes, nor must they be directly and actually needed for "turning out or the creation of goods." 7. Thus, in terms of the above judgment of the Apex Court, the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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