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TMI Blog2016 (6) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... /cement storage shed, is not admissible. The credit availed for the purpose of shed is disallowed. The records do not separately show the quantification of credit availed on MS items used for sheds. - Matter remanded back for quantification - Decided partly in favor of assessee. - E/1805/2011, E/1596/2012 - A/30457-30458/2016 - Dated:- 19-5-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) Sh V.J. Sankaram, Advocate for the Appellant. Sh R. Manohar, Additional Commissioner (AR) for the Respondent ORDER The issue involved in the above appeals being the same, they were heard together and are disposed by this common order. 2. The appellants are engaged in manufacture of asbetos cement product like corrugated sheets a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods that are used in the plant and machinery for their new line of production (i.e. expansion of production capacity). It was noted that appellant had used the subject items (MS Plates, Angles etc.,) for fabricating /assembling /erection of following: 1. Plant shed 2. Machinery equipment 3. Generator Shed 4. Fibre/Cement Storage shed 5. Fibre preparation/Handling 6. Cement handling equipment 7. Fly ash handling equipment 8. Pulp handling equipment 9. Mixing slurry preparation Cone tanks and water Recirula 10. Main machine vaccums area 11. Sheet handling equipment 12. Heating system Accessories 13. Waste handling equipment 14. Captive power- chimney 15. EOT crane handling equipme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 1 of Rule 57Q and classifiable under any chapter heading are eligible for availment of Modvat credit. That this circular is not withdrawn and is still in force. 7. The relevant portion of the Circular is reproduced as below: The matter has been examined w.e.f. 23.07.1996, capital goods eligible for credit under Rule 57Q have been specified either by their classification or by their description. Clauses (a) to (c) of Explanation (1) of the said rule cover capital goods by their classification, whereas clause (d) covers goods by their description viz: components, spares and accessories of the said capital goods. It may be noted that there is a separate entry for components, spares and accessories and no reference has been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76/110/96 dated 02.12.1996 need not fall under chapter 82, 84, 85 and 90. That credit has been rightly denied observing that subject items do not come within chapter 82, 84, 85 and 90 or under parts, components or accessories and are therefore not capital goods. 10. It then becomes necessary to analyse whether the subject goods will fall under parts, components and accessories. In various judgments it has been settled that an object or device not essential in itself, but adding to beauty, convenience or effectiveness of something else is an accessory. In CCE, Salem Vs Chemplast Sanmar Ltd., [2014 (310) ELT 870 (Mad)], the Hon ble High Court of Madras held that credit is admissible on Iron Steel products falling under chapter 73 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and equipments also. The credit has been disallowed for the reason that MS items were used for civil construction work and for the reason that they are neither by themselves capital goods, nor are they components, parts, accessories of capital goods. 13. The Hon ble Apex Court, in the case of CCE Coimbatore Vs Jawahar Mills Ltd., [2001 (132) ELT 3 (S.C)] evolved the user test and held credit is admissible on capital goods, if they satisfy the test. The court referred to the erstwhile definition of capital goods (explanation to Rule 57Q), and observed that the definition of capital goods is very wide. At this juncture, the Board Circular No. 276/110/96 TRU - dated 02.12.1996 becomes relevant. Further, as per definition of capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in, the Tribunal in the case of CCE Cus, Vishakapatnam Vs M/s APP Mills Ltd., [2011-TIOL-01378 CESTAT, Banglore] held that the decision in Vandana Global Ltd., (supra) was rendered much before the Hon ble Apex Court s decision in Rajasthan Spinning Weaving Mills Ltd., case (supra) and therefore the decision made in Vandana Global Ltd., case is no longer good law. The said judgment in Vandana Global has been appealed before the Hon ble Chattisgarh High Court. It is to be mentioned that the Hon ble Court in the case of UOI Vs Associated Cement Company Ltd., [2011 (267) ELT 55 (Chattisgarh)] relied on the judgments in Jawahar Mills Ltd., case and Rajasthan Spinning Weaving Mills Ltd., case to hold that credit availed on Ms items as cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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