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TMI Blog2016 (10) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of 'inputs' during the relevant period under explanation 2 in Rule 2(k) includes goods used in manufacture of capital goods which are further used in the factory of the manufacturer. Further, clause (i) of Rule 2(k) provides 'input' means all goods used in or in relation to manufacture of final products which directly or indirectly and whether contained in final product or not and includes items like lubricating oils, grease, cutting oils etc., in relation to manufacture of final product or for any other purpose within factory of production. I find that most of the items in question have been indisputably utilized in the factory of production of excisable goods and without the use of which the appellant could not have manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e items do not appear eligible for Cenvat Credit as capital goods in terms of Sub-Clauses of Rule 2(a)(A) of CCR, 2004. As these items do not appear to be covered under the description of components/spares/accessories of capital goods and as such are not covered under Sub-Clause No.(iii) of Rule 2(a)(A) of CCR, 2004. The SCN was adjudicated on contest, and the proposed demand confirmed recording of finding that the appellants have been used in the earth and immovable property. The packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat loss. The subject items are therefore, neither inputs nor capital goods for manufacture of Sugar. Neither are they used in manufacturing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of penalty imposed under Rule 14 of CCR. Observing that the appellant have claimed that said items have been used in fabrication of Pan and Juice Heater. As the appellant has themselves used word 'fabrication' instead of 'manufacture' which have definite meaning under Central Excise Act. Further observed that the appellant have stated that partial fabrication of machinery etc. which is clearly repair and maintenance work as alleged in the Demand notice. Being aggrieved, the appellant had preferred an appeal before Ld. Commissioner(Appeals), who vide the impugned order was pleased to reject the appeal, observing that the appellants have failed to counter and controvert the allegations in the SCN and the findings of the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing activity without repair of plant and machinery. In the Ruling of Apex Court, in the case of J.K. Cotton Spg. Weaving Mills Co, Ltd. Vs. Sales Tax Officer, Kanpur reported at 1997 (91) E.L.T. 34 (SC), while interpreting the scope of expression used in the manufacture of in Section 8(3)(b) of CST Act, 1956, it was held that if a process or activity is so integrally related to the ultimate manufacture of goods so that without such process or activity, the manufacture may, even if theoretically possible, be commercially inexpedient, the goods intended in that process or activity would have to be treated as used in the manufacture. It was further observed that the definition of 'input' in Rule 2(k) of CCR, 2004 is much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. It is further observed that pursuant to the Ruling of Vandana Global Ltd. Vs. CCE, Raipur, the same have been distinguished by Hon'ble Madras High Court in case of India Cement and by Hon'ble Gujrat High Court in case of Mundra Ports Special Economic Zone Ltd. Further, the definition of inputs in Rule 2(k) of CCR means and includes all goods used in the factory by the manufacturer of the final product. It also includes any goods including accessories, cleared with the final product, the value of which is included in such final product. 7. I also notice that the definition of 'inputs' during the relevant period under explanation 2 in Rule 2(k) includes goods used in manufacture of capital goods which are further used in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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