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TMI Blog2015 (10) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufactured of final products are entitled to credit as capital goods. - Goods fabricated in question qualify as capital goods and also as inputs within the meaning of Rule 2(a) read with Rule 2(k) of the CENVAT Credit Rules, 2004. Accordingly, the assessee is entitled to CENVAT credit availed on the items in question for fabrication of the capital goods in question, further utilised in the factory of production. - Decided against Revenue. - Appeal No. E/182/2009, Cross Objection No. E/CO-43/2009 - - - Dated:- 9-4-2015 - Anil Choudhary, Member (J) For the Petitioner : Shri Ashutosh Nath, Asstt. Commissioner (AR) For the Respondent : Shri P V Sadavarte, Adv ORDER Per Anil Choudhary The Revenue is in appeal against Order-in-Appeal No: SN/130/NGP/2008 dated 28/11/2008 passed by the Commissioner of Central Excise Customs (Appeals), Nagpur. 2. Brief facts of the case are that the assessee, M/s. Chinteshwar Steels Pvt. Ltd., is engaged in the manufacture of sponge iron falling under Chapter 72 of the Central Excise Tariff. The assessee have availed CENVAT credit of duty paid on the inputs as well as capital goods including inputs utilised in the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se were exempted by Notification 67/95-CE. 4. Show cause notice dated 06/08/2007 was issued proposing to deny credit on the iron and steel and other items used in the manufacture of aforementioned capital goods on the ground that the respondent have treated all the goods falling under sub-heading 7208 and 7216 as inputs/capital goods used in the factory of production. As per the definition of 'capital goods' CENVAT credit taken by the assessee on goods falling under Chapter 72 is not covered and accordingly it appears that the assessee has taken wrong credit being 50% on the goods like channels, angles, joist, HR coils, HR plates, etc. The assessee contested the show cause notice by filing a detailed reply. However, the show cause notice was confirmed holding that channel, angle, coil, plates, etc. falling under Chapter heading 7216.10, 7208.31, 7238.11 on which credit had been availed considering the said goods as capital goods, is wrong as the definition of capital goods does not include the same relying on the rulings of the apex Court in the case of Vikram Cement vs. Commissioner of Central Excise 2005 (187) ELT 145 (SC). As regards the Chartered Engineer's certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, whereas they are entitled to 100% of the duty paid on such inputs. This issue is no longer res integra as the same has been settled by series of order of the Hon'ble CESTAT, which has been relied upon in the Memorandum of appeal. Copies of the relied upon case law is submitted at the time of Personal hearing. Further, penalty cannot be imposed under Section 11AC as well as Rule 25. Their pleading is that no penalty be imposable at all. The issue is settled in number of orders of the Hon'ble CESTAT and may be decided accordingly. 4.2 The Departmental Representative has nothing to add than what is stated in Order-in-Original. 5. I have carefully gone through the records of the case before me including the submissions made at the time of personal hearing. My observations are as under: (1) OIO dtd. 1.3.2008 was received by the appellant on 15.3.2008 and the appeal was filed on 29.4.2008. The appeal is in time under Section 35 of CEA, 1944. (2) It is the fact that this issue is no longer integra as the same has been settled by series of order of Hon'ble CESTAT. In the case of Ritesh Trade Fin Ltd. V/s. CCE, Bolpur, the CESTAT Kolkata reported as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of civil construction of work, supporting structure, storage tank and working platform and hence cannot be considered as component/spares and accessories specified under Clause (i) and (ii) of the definition of 'capital goods' under Rule 2 (a) of the CENVAT Credit Rules, 2004. It is further contended that the items, fabricated out of the inputs in question being immovable property, are not excisable and hence the same are not admissible. However, the alternate plea of the assessee that the goods in question were used captively in the manufacture of capital goods is not sustainable as Notification No. 67/95 as amended exempts 'capital goods' as defined under CENVAT Credit Rules manufactured in a factory and used within the factory of production from the whole of the duty of excisable leviable thereon. Further, with reference to Rule 6(1) of CCR, it was contended that the CENVAT credit shall not be allowed on such quantity of inputs which are used in the manufacture of exempted goods except under circumstances mentioned in sub-rule (2). Reliance is placed on the rule in the case of Vandana Global Ltd. vs. Commissioner of Central Excise 2008 (230) ELT 169 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies /components in boiler/centrifugal machine like crystallizer /juice heater for making shades and fabrication of various items including staging/supporting structure and repair of machinery including replacement of worn out parts, where CENVAT credit was availed, it was held that such items were used neither for producing nor for processing of any goods or bring about any change in any substance or manufacture of final products and thus, these were not capital goods as defined in explanation to Rule 57Q of erstwhile Central Excise Rules, 1944 or under Explanation 1(a) of Rule 58Q. 8. In reply, the learned counsel for the assessee, Shri Sadavarte, states that Revenue has not disputed the facts that the inputs were received in the factory, such inputs were purchased on valid duty paying documents, that the credit was taken on valid duty paying documents and the inputs have been used in the manufacture of goods/capital goods which are further used in the manufacture of final products i.e., sponge iron. It is further stated CENVAT credit has been availed in terms of Explanation 2 to Rule 2 (k) of CENVAT Credit Rules, 2004. As per Rule (k) of CENVAT Credit Rules, 2004 'inputs&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbedded to earth and installed to form a part of the tube mill. Components purchased from the market were like motors, coupling, gear boxes, bearing, castings etc. These were assembled and installed on the site to form part of the tube mill which was also covered in the process of welding facility. It was held in that case, the plant and machinery embedded to earth/structures and installations are not excisable since they do not pass the twin test of being moveable and capable of being brought to the market. In the case of Vikram Cement vs. Commissioner of Central Excise (supra) the assessee was engaged in the manufacture of cement and clinkers falling under Chapter 25. The use of explosives, welding electrodes, lubricating oil and crusher for extraction of limestone and crushing in the mines adjacent to the cement factory of the assessee. CENVAT credit was availed on the items being capital goods like limestone crusher, mining equipment, etc. It was held that only the items falling under specified chapters/heading their spare parts /components/accessories or otherwise specified and used in the factory of manufactured of final products are entitled to credit as capital goods. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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