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TMI Blog2010 (8) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... , Angles, H.R. Slide, Slitting etc. (c) CAF Jointing Sheets, Asbestos packing, Steam Jointing, Jointing Sheets, D.E. White Metal, Metalic Graphite, Style Packing etc. (d) White lead (e) Winding Wire, Winding, Red led and Break Liner, Coils, Copper Wire Aluminium Wire Copper Sheet, etc. (f) Component of P.D. Pumps. 4. The Original Authority passed the orders denying the Cenvat credit, ordering recovery of equal amount of duty along with interest and imposing equal amount of penalty (show cause notices included proposal for denial of credit on some more items, which were allowed by the Original Authority. The list mentioned above relates to the items on which the credit stands denied by the Original Authority and upheld by the Commissioner (Appeals). 5.1 Ld. Advocate appearing for the appellants referring to the findings of the Commissioner (Appeals) item-wise submitted the following :- (a) Welding Electrodes : Welding Electrodes were used for fabrication of tubes and pipes and various equipments like boilers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of P.D. Pumps are to be treated as capital goods, the cenvat credit is available. He relies on the decision of the Tribunal in the case of Commissioner of Central Excise v. Punjab Chemical & Pharm. Ltd. reported in 2000 (116) E.L.T. 461 (Tribunal). 5.2 He also submits that as the dispute relates to interpretation of legal provisions of Cenvat Credit Rules, no mens rea can be attributed to the appellants and there is no justification for imposition of penalty. 6.1 Ld. DR made the following item-wise submissions :- (a) Welding Electrodes He relies on the decision of the Tribunal in the case of Vikram Cement reported in 2009 (242) E.L.T. 545 (Tri.-Del.). (b) M.S. Plates, Shape & Section, H.R. Plate, Steel Sheets, Article of Iron Steels, Roof Sheets of Iron, S.S. Plates, Carbon Steel bar, Flat Bar, Channel, Angles, H.R. Slide Slitting etc.: He submits that the items referred to are basically used for fabricating supporting structures and the same are not eligible for credit as held by the Larger Bench of the Tribunal in the case of Vandana Global Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pee Rewa Plant v. C.C.E., Raipur - 2003 (159) E.L.T. 553 is not a good law in view of the decision of the Hon'ble High Court of Rajasthan in the case of Hindustan Zinc Ltd. reported in 2008 (228) E.L.T. 517 which approved the ratio of the Larger Bench of the Tribunal in the case of Jawahar Mills Ltd. - 1999 (108) E.L.T. 47 and disapproved the decision of the Larger Bench of the Tribunal in the case of Jaypee Rewa Plant cited supra. The Hon'ble High Court also held that the decision of the Kolkata Bench of the Tribunal in the case of SAIL v. C.C.E., Ranchi - 2008 (222) E.L.T. 233 relying on the decision of the Larger Bench in the case of Japyee Rewa Plant cannot be held to have been approved by the Hon'ble Supreme Court even though the SLP filed by the party against the said decision has been dismissed. In view of the above, as the Hon'ble High Court of Chhattisgarh has held that welding electrodes used in repair and maintenance of plant and machinery are inputs as defined under Rule 2(g) of the Cenvat Credit Rules, 2002. In view of the above decision, appeal of the party in so far as the same relates to welding electrodes deserve to be allowed. M.S. Plates, Shapes and Sections, H. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same is applicable retrospectively. (e) It was also held that the foundation and supporting structures are neither inputs nor components, spares and accessories of machinery, nor have they been listed for such inclusion in the definition of capital goods. With the above findings and observations, the question referred to Larger Bench were answered as follows : "49. In the light of the foregoing findings, we answer the questions referred to the Larger Bench as follows :- (a) The terms "capital goods" has been defined in the Cenvat Credit Rules, which in turn have been framed under the rule making powers conferred under Section 37(2) of the Act. The said Section refers to credit of duty paid on goods used in, or in relation to the manufacture of excisable goods. Hence, 'capital goods' defined in the Cenvat Credit Rules in the context of providing credit of duty paid, have to be excisable goods. Whether a particular plant or structure embedded to earth can be considered as excisable goods or not has to be determined in the light of the decisions of the Hon'ble Supreme Court on the issue, which is no longer res integra. (b)&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the credit has to be allowed only in respect of winding wires.
Components of P.D. Pumps
8.5 The submission of the learned DR that during this period, P.D. Pumps are excluded from the definition of capital goods and therefore, the components of said P.D. pumps cannot be treated as capital goods deserves acceptance, as the appellants have not contradicted this factual position. Therefore, the credit is not available to them on these items. .
9. In view of the above, appeals are disposed of as follows :-
(a) Cenvat credit is allowed on welding electrodes, CAF Jointing Sheets, Asbestos packing, Steam Jointing, Jointing Sheets, D.E. White Metal, Metalic Graphite, Style Packing etc. and White Lead and Winding Wires. The orders of authorities below to the extent of denying credit on these items are set aside.
(b) Disallowance of credit on other items are upheld.
(c) The original authority shall rework the demand accordingly.
(d) In the facts and circumstances of the case, no penalty is warranted and the same is set aside.
(Pronounced in the open Court on 24-8-2010) X X X X Extracts X X X X X X X X Extracts X X X X
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