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TMI Blog2015 (8) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... livered by V. RAMASUBRAMANIAN, J. ) These appeals are by the asssessee, under section 35G of the Central Excise Act, 1944. 2. Heard Mr.R.Bharanidharan, learned counsel for the appellant and Mr.T.Chandrasekaran, learned Senior Panel Counsel for the Revenue. 3. The appellant/assessee is the manufacturer of various kinds of cement under CSH 2502.29 and 2502.90 of the Central Excise Tariff Act, 1985. During the course of verification of a declaration filed by the assessee, under Rule 57A of the Central Excise Rules, 1944, the assessee declared certain capital goods as inputs under Rule 57A for the manufacture of intermediary product viz., machinery and machinery parts falling under Chapter 84.00, reportedly used for manufacture of final product viz., cement. They claimed exemption under the Notification No.67/95 CE dated 16.3.1995. 4. Claiming that the assessee failed to furnish certain particulars, show cause notices were issued calling upon them to show cause as to why the declaration filed under Rule 57A should not be rejected under Rule 57G. 5. Thereafter, a scrutiny of RT 12 returns filed by the assessee were made and they were alleged to have wrongly taken modvat credit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods credit under Rule 57Q was admissible in respect of steel angles used in the fabrication of conveyors for the period prior to 23.7.1996, which is the date on which the earlier clauses (a) and (b) of explanation (1) to sub-rule (1) of Rule 57Q were deleted. As a consequence of the above finding, the Tribunal dismissed the three appeals filed by the assessee and allowed one appeal partly and remanded the matter to the original authority to quantify the capital goods credit on steel angles for the period prior to 23.7.1996. Therefore, the assessee has come up with the three appeals. 11. On 11.6.2009, the appeals were admitted on the following two questions of law:- "1. Whether the modvat credit is admissible on cement and steel used in laying the foundation on which machinery is fixed to function effectively? 2. Whether modvat credit is admissible on cement and steel angles used in the construction of support structure for providing support to machinery employed in manufacture of final product?" 12. As can be seen from the two questions of law framed, the assessee claimed modvat credit, first in respect of cement and steel used in laying the foundation on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products, whether under the Act or under any other Act, as may be specified in the said notification, subject to the provisions of this section and the conditions and restrictions that may be specified in the notification: Provided that the Central Government may specify the goods or classes of goods in respect of which the credit of specified duty may be restricted. Explanation -- For the purposes of this rule, "inputs" includes-- (a) inputs which are manufactured and used within the factory of production, in or in relation to, the manufacture of final products, (b) paints and packaging materials, (c) inputs used as fuel, (d) inputs used for generation of electricity, used within the factory of production for manufacture of final products or for any other purpose, and (e) accessories of the final product cleared alongwith such final product, the value of which is included in the assessable value of the final product, but does not include -- (i) (i) machines, machinery, plant, equipment, apparatus, tools, appliances, or capital goods as defined in rule 57Q (other than those used as component parts in the manufacture of final product) used for produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts. The words shown within brackets viz., "whether directly or indirectly and whether contained in the final product or not" make it very clear that the duty paid in respect of which credit is claimed, need not necessarily be used in the final product. Even if such goods had been used in relation to the manufacture of the final product, the credit stipulated in sub-rule (1) is allowable. 17. To lay emphasis on the words included within brackets, the body of sub-rule contains another set of words, again within brackets. Those words are "hereinafter referred to as inputs". Thus, they emphasis on the fact that credit is allowed in respect of the duty paid on goods whether they could be found in the final product or not, by using certain expression within brackets, not once but, twice. Sub-Rule (1) also contains explanation that defines the term inputs. The explanation (a) of sub-rule (1) makes it clear that the expression input would include inputs which are manufactured and used within the factory of production in or in relation to the manufacture of the final products. Therefore, if an assessee is able to show that he is manufacturing finished excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and used in the factory of the manufacturer, namely:- (a) all goods falling under heading Nos.82.02 to 82.11; (aa) all goods falling under Chapter 84 (other than Internal Combustion engines falling under heading No.84.07 or 84.08 and of a kind used in motor vehicles, Compressors falling under heading No.84.14 and of a kind used in refrigerating and airconditioning appliances and machinery, heading or sub-heading Nos.84.15, 84.18, 8422.10, 84.24, 84.29 to 84.37, 84.40, 84.50, 84.52, 84.69 to 84.73, 84.76, 84.78, expansion values and solenoid valves falling under sub-heading No.8481.10 of a kind used for refrigerating and airconditioning appliances and machinery); (b) all goods falling under Chapter 85 (other than those falling under heading Nos.85.09 to 85.13, 85.16 to 85.31, 85.39 and 85.40); (c) all goods falling under heading No.90.11 to 90.13, 90.16, 90.17, 90.22 (other than for medical use), 90.24 to 90.31 and 90.32 (other than of a kind used for refrigeration and air-conditioning appliances, and machinery); (d) components, spares, and accessories of the goods specified agains ..... 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