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TMI Blog2016 (10) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... the records of evidence of use and consumption of subject items, if not already produced, the same are to be produced by the appellant before the original adjudicating authority within one month and thereafter within next two months, the original adjudicating authority shall pass appropriate orders. Appeal disposed off - decided partly in favor of appellant. - Excise Appeal No. 173 of 2009 - Final Order No.53591/2016 - Dated:- 16-9-2016 - Dr. Satish Chandra, President And Mr. Ashok K. Arya , Technical Member Shri B.L. Narasimhan, Advocate, for the appellant/assessee Shri R.K. Manjhi, A.R. for the Respondent/Revenue ORDER Per Ashok K. Arya This is an appeal against the impugned order dated 16.10.2008 passed by the Commissioner, Central Excise and Customs, Raipur. 2. The impugned order has disallowed the cenvat credit totally amounting to ₹ 11,45,87,210 and has imposed equivalent penalty on the appellant. The impugned order also confirmed duty of central excise amounting to ₹ 60,27,728/- and has also imposed equivalent penalty on the appellant. 3. The appellant has been represented by the ld. Advocate Shri B.L. Narasimhan who in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned iron and steel item as inputs used for manufacture of various parts/components/ accessories of specified capital goods falling under Chapters 82, 84 and 85 of First Schedule to Central Excise Tariff Act, 1985 in as much without the supporting structures, erection and installation of huge machinery would not be possible and such machinery cannot be operated. (iv) As per Explanation 2 to Rule 2(a) of Cenvat Credit Rules, 2002/Rule 2(k) of Cenvat Credit Rules, 2004, inputs include goods used in the manufacture of capital goods which are further used in the factory of manufacturer. Since the impugned goods have been used to manufacture parts/components/ accessories of various capital goods within the factory of the Appellant, as per said explanation, Cenvat credit would be admissible on iron and steel items in the present case. (v) The Appellant submits that steel is to be considered as used in or in relation to manufacture of dutiable final products since without use of such steel, activity of setting up of plant could not have been completed. (vi) Activities undertaken like cutting, bending, etc., amount to manufacture and that dutiability of resultant product wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Omax Auto v. CCE, 2014 (314) E.L.T. 439 (Tri. - Del.) * Jodhpur Alloys Pvt. Ltd. v. CCE, 2013 (292) E.L.T. 448 (Tri. - Del.) * CCE v. Hi-Tech Power Steel Ltd., 2015 (315) E.L.T. 428 (Tri. - Del.) * Simbhaoli Sugars v. CCE, 2016-TIOL-550-CESTAT-ALL * CCE v. Jindal Steel Power Ltd., 2015 (330) E.L.T. 708 (Tri. - Del.) * Mundra Ports Special Economic Zone Ltd. v. CCE, 2015 (39) S.T.R. 726 (Guj.) * Ultratech Cement Ltd. v. CCE, 2016 (332) E.L.T. 356 (Tri. - Del.) * VST Industries v. CCE, 2015 (330) E.L.T. 565 (Tri. - Bang.) * Shree Narmada KhandUdyogSahakariMandli Ltd. v. CCE, 2015 (329) E.L.T. 820 (Tri. - Ahmd.) * ITC Ltd. v. CCE, 2012 (285) E.L.T. 292 (Tri. - Chennai) * CCE v. Orion Ferro Alloys Pvt. Ltd., 2010 (259) E.L.T. 84 (Tri. - Del.) * Diamond Power Infrastructure Ltd. v. CCE, 2015 (40) S.T.R. 825 (Tri. - Ahmd.) * SAIL v. CCE, 2008 (222) E.L.T. 233 (Tri. - Kolkata) * Hindustan Copper Ltd. v. CCE, 2006 (206) E.L.T. 276 (Tri. - Del.) * CCE v. Jindal Steel Power Ltd., 2006 (201) E.L.T. 598 (Tri. - Del.) * Tata Engineering And Locomotive Co. Ltd. v. CCE, 2005 (191) E.L.T. 209 (Tri. - Mumbai) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 which defines inputs . It would be appropriate to reproduce Rule 2(k) of Cenvat Credit Rules, 2004 along with the Explanations: 2(k) input means (i) all goods , except light diesel oil, high speed oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oil, greases, cutting oils, coolants, accessories of the final products cleared along with the final products, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose used in the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output services; Explanation 1. The light diesel oil, high speed diesel oil or Motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2.- Inputs include goods used in the manufacture of capital goods, which are further used in the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. 2010 (253) ELT 440 (Tri-LB) and other decisions listed in their written submissions mentioned in the para 5.1 above that the appellant is not eligible for cenvat credit on the findings of the impugned order. The appellant however submits that the submissions and the arguments of the Revenue do not have any sufficient force for sustaining the impugned order in the face of the Hon ble Supreme Court s decision in Rajasthan Spinning Weaving Mills Ltd. 2010 (255) ELT 481 (SC) and other decisions listed by them as mentioned earlier in this order in para 4. 8.2 Revenue argues that structural steel items like angles, channels, beams, etc. have been used for manufacturing supporting structures for capital goods like boilers, coal handling mills, and said supporting structures cannot be called capital goods, and/or goods even; therefore, for the said inputs cenvat credit is not admissible. 8.2.1 But we are unable to comprehend that when there are no supporting structures for capital goods like boilers, coal handling mills, how would these capital goods/equipments operate In other words, in order to make such capital goods like boilers, coal handling mills, conveyors etc. fully op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t structural steel items used for structure of plant comprising concrete foundation, concrete silos for storing raw materials would be eligible items for claiming cenvat credit. In this regard the Hon ble High Court s observations in the said case are reproduced below: 7. As far as the other items, namely, Rebar Coils, CTD Bars, TOR Steel and Cement are concerned, as to whether they are capital goods or not, the Tribunal having regard to the law laid down by the Apex Court in Jawahar Mills s case, has liberally construed the above Rule and factually found that these are the items, which are used for the purpose of construction of the plant comprising of concrete foundations, concrete silos for storing raw materials, clinker and cement, pre-heater tower structure, load centres etc. Having regard to the above factual findings, the Tribunal had found that these items are not used for civil construction, but for the construction, which are absolutely necessary for establishing a manufacturing unit for cement. 8. The question as to how Rule 57Q should be interpreted came up recently before the Apex Court in the judgment reported in 2010 (255) E.L.T. 481 (Commissioner of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said items. The same user test has been quoted and applied by Hon ble Supreme Court in the case of Rajasthan Spinning Weaving Mills (supra) where steel plates and MS channels used in the fabrication of chimney were held admissible for claiming cenvat/modvat. In this regard, the observations made by the Hon ble Supreme Court in the case of Jawahar Mills (supra) are given below: 4. The aforesaid definition of Capital goods is very wide. Capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances. Any of these goods if used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product would be Capital goods , and, therefore, qualify for availing Modvat credit. Per clause (b), the components, spare parts and accessories of the goods mentioned in clause (a) used for the purposes enumerated therein would also be Capital goods and qualify for Modvat credit entitlement. Clause (c) makes moulds and dies, generating sets and weigh bridges used in the factory of the manufacturers as capital goods and thus qualify for availing Modvat credit. The goods enumerated in clause (c) need not be use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the above discussion, the appeal on this issue is allowed with consequential relief. 9. The second issue in the appeal is the denial of exemption benefit of Notification No.67/95-CE for the items like angles, channels, beams manufactured and captively consumed for fabrication of structural goods by the appellant. The adjudicating authority namely the Commissioner has denied the benefit of exemption Notification No.67/95-CE dated 16.3.95 mainly on the ground that the appellant did not maintain stock account of inputs and so-called capital goods manufactured within the factory nor did they furnish any ER-1 return to declare the particulars of such manufacture and captive clearance. 9.1 On the other hand, the appellant argues that they submitted all details of iron and steel items manufactured and captively consumed in the form of ER -1 return and also submitted that the details of records were being maintained but the same was not considered by the authorities below. 9.2 From the language of the Notification, prima facie, it appears that the appellant is entitled to the benefit of Notification No.67/95-CE as the iron and steel items like angles, channels, beams etc. hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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