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TMI Blog2016 (6) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are eligible for credit of excise duty paid on cement, under the category of inputs. - Decided in favor of assessee. - E/22896 TO 22905/2014 - A/30350-30359/14 - Dated:- 17-5-2016 - Ms. Sulekha Beevi, Member(Judicial) Shri N.Anand, Advocate for the Appellant Shri P.Narasimha Rao, AR for the Respondent ORDER The issue that arises for consideration in these appeals being the same, they were heard together and are disposed by this common order. 2. The appellants are engaged in the manufacture of sugar and molasses and are registered with the Central Excise Department. They are availing the facility of Cenvat credit on inputs, capital goods and input services. Due to expansion of factory, the appellant procured various capital goods which were heavy plant and machinery and for the purpose of installation and erection used cement . The appellant availed Cenvat credit of the duty paid on cement as capital goods. During different periods from January, 2004 to January, 2007, the credit was availed on excise duty paid on cement used for installation, and erection of capital goods used for manufacture of final products. Show cause notices were issued allegin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are before the Tribunal. 6. I have heard both sides and perused records. The issue is whether credit on cement used for foundation (Installation and erection) of plant and machinery is admissible or not. 7. The learned counsel for appellant Shri N.Anand submitted the details of appeals and credit involved in a tabular form which is as below: Appeal Ref. Unit Period involved SCN ref.C.No. Credit involved Penalty imposed Remarks E/22896/2014 Bhimadole Jan. 2006 to Dec.2006 V/15/05/07 dt.25.1.07 2,55,816 2,55,816 OIA No.71/2007 dt.28.1.07 - Allowed appeal. CESTAT remanded the case E/22897/2014 Taduvai May. 2004 to April,2005 V/15/22/05 dt.25.5.05 8,544 1,000 OIA No.16/2007 dt.18.6.07 - Allowed appeal. CESTAT remanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46,410 46,410 OIA No.19/2007 dt.18.6.07 - Allowed appeal. CESTAT remanded the case 8. After explaining the above details the learned counsel pointed out that the period involved in all the appeals are prior to 07-07-2009. Though the credit was availed under the category of capital goods, the Tribunal while remanding the matter had offered opportunity to appellant to refute decision laid by Larger Bench. The appellant then had raised a contention before the Commissioner (Appeals) in the remand proceedings that if credit is not admissible under the category of capital goods, the appellant was eligible for credit of duty paid on cement as inputs . Before the amendment made to Explanation 2 of the Rule 2(k) - definition of input the claim of credit on cement and steel as inputs was being allowed. Cement was used indirectly in relation to manufacture of finished goods and whatever is used in the manufacture of final product, is eligible for credit. The definition of inputs during the material time did not exclude cement. Though this alternate plea was raised before the Commissioner (Appeals) in remand proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant and machinery. The first part of the definition of inputs as seen above, uses the word includes . The word include used in the definition of inputs is not restrictive. The definition of input during the material time did not exclude cement. Later by the amendment brought forth on 07-07-2009 the definition specifically excluded cement. Explanation 2 contained in the definition of input after 07-07-2009 is noticed as below for better appreciation: Explanation 2: Input include goods used in manufacture of capital goods which are further used in the factory of the manufacturer but shall not include cement, angles, channels, Centrally Twisted Bar(CTD) or Thermo Mechanically Treated Bar(TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods . 11. Prior to 07-07-2009, there were many case laws which allowed credit on cement used as input for foundation and civil works. The words include goods used in Explanation 2 prior to 07-07-2009 had a wide connotation and could include anything including cement and steel items used for constructing the structure or for founda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and the manufacture of excisable goods will not take place. 15. The Honble High Court of Madras in the case of CCE, Tiruchirapalli Vs India Cements Ltd. 2014(305) ELT-558(Mad) and India cements Ltd Vs Cestat Chennai 2015(321) ELT 209(Mad) had occasion to consider the eligibility of credit availed on steel items and cement as capital goods used for construction of support structures of capital goods. The credit was held to be admissible. The Hon ble Court observed that the steel items being used for fabrication of structure for support/erection of various machines, by applying the user test as laid in Rajasthan Spinning Weaving Mills case 2010(255) ELT 4815.C would be eligible for credit as capital goods. 16. In the case of Mundra Port and SEZ Ltd Vs CCE and Cus 2015(39) STR 726(Guj) the appellants therein had availed credit of the excise duty paid on cement and steel used in the construction of new jetties. The Hon ble court held that credit is admissible on cement. 17. Following the decision laid by Larger Bench of Apex court in the case of Ramala Sahkari Chini Mills Ltd (supra) I am of the opinion that appellants are eligible for credit of excise duty pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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