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TMI Blog2017 (4) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods be treated as inputs, I find that these goods are not used in or in relation to manufacture of final products and they are also not used in the manufacture of capital goods which are further used in the factory of manufacturer. Hence, this claim is also not tenable. Extended period of limitation - penalty - Held that: - The irregular availment of Cenvat Credit was revealed by the Audit of the party and came to the notice after examining their documents - the extended period has rightly been invoked and penalty has rightly been imposed. As for the interest, the same is compensatory in nature. Appeal dismissed - decided against appellant. - E/57276/2013 - A/60289/2017-SM[BR] - Dated:- 20-2-2017 - Mr. Devender Singh, Member (Technical) Sh. Surjeet Bhadu, Advocate for the Appellants. Sh. Satyapal, A.R. for the Respondent. Per : Devender Singh The appellants are in appeal against the impugned order dated 04.02.2013 passed by the Ld. Commissioner (Appeals), Chandigarh-II. 2. The brief facts of the case are that M/s Winsome Yarns Ltd, are holding Central Excise Registration for the manufacture of Cotton Yarn, Cotton Viscose and Cotton Polyeste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat account. Further, there was no allegation of utilization of credit. Since they had lot of unutilized credit no malafide could be attributed for this humongous amount. While credit of ₹ 5,93,453/- was not reversed, the same was not utilized. Arguing on the merits, he stated that the duct was part of humidification plant and the same cannot function without duct. The humidification plant was machinery falling under Chapter 84 and capital goods as whole and not a plant. He referred to the Chartered Engineer certificate at Page 72 of the Paper Book certifying that G.P. Sheets are used in making of duct for humidification plant which cannot function without the duct. He also argued that tubes and pipes, as per HSN, include cross-sections of any shape and air ducts are nothing but concentric hollow products of uniform cross sections. Therefore, tubes and pipes are capital goods made from GP sheets. Alternatively, he argued, the appellants would be entitled to credit as input in view of explanation to Rule 2(k) of Cenvat Credit Rules, 2004. On penalty, he stated that since Cenvat Credit has been taken wrongly and not fraudulently, no penalty and interest was leviable. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new definition has been decided by Tribunal in the case of CCE, Chandigarh Vs. Modern Steel Ltd. (supra). In the instant case, the air duct being manufactured from the GP Coils/GP Sheets has been claimed as part of humidification machine which takes shape of plant after the installation of air ducts in different places in the factory premises. I find that the present issue is fully covered by the Tribunal decision of Modern Steel referred above and also relied upon by the First Appellate Authority. Relevant extracts of the said judgment are extracted below:- 7. The word plant has a very wide meaning. As held by the Supreme Court in Scientific Engineering House (P) Ltd. v. Commissioner of Income Tax, reported in (1986) SCC 11 : Plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant the article must have some degree of durability. The test to decide whether a particular article is plant or not is : Does the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to which the definition of capital goods, as provided in Rule 2(b) of the CENVAT Credit Rules, 2002 would alone apply. Since plant and components or parts of plants have been excluded under Rule 2(b) of the CENVAT Credit Rules, the decisions in Simbhaoli Sugar Mills Ltd. and Malvika Steel Ltd. have been erroneously relied on by the Commissioner (Appeals). 9. In the above view of the matter, the impugned order made by the Commissioner (Appeals) cannot be sustained and it is hereby set aside and the order in original is restored. This appeal is accordingly allowed 9. In view of the above, the Ld. Commissioner (Appeals) has rightly rejected the claim of the appellants that the impugned goods are either capital goods or parts of the capital goods. 10. As for the claim of the appellants that the impugned goods be treated as inputs, I find that these goods are not used in or in relation to manufacture of final products and they are also not used in the manufacture of capital goods which are further used in the factory of manufacturer. Hence, this claim is also not tenable. 11. As for the penalty and the extended period, I find from the records that the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion, the facts of the present case clearly suggest willful suppression of material facts by the assessee as well as contravention of the provisions of the Act and rules framed thereunder with an intent to evade the demand of duty as would be covered by Clauses IV and V of Section 11A(1) of the Act, 1944. Therefore, the invocation of the extended period of limitation in the facts of the present case is fully justified. Applying the ratio of the above High Court judgment, I find that the extended period has rightly been invoked and penalty has rightly been imposed in this case. 13. As for the interest, the same is compensatory in nature. In this regard, reliance is place on the judgment of the Hon ble Apex Court in the case of Pratibha Processors Vs. UOI - 1996(88) ELT 12 (SC) wherein it was held as under:- 13. In fiscal Statutes, the import of the words -- tax , interest , penalty , etc. are well known. They are different concepts. Tax is the amount payable as a result of the charging provision. It is a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by law. Penalty is ordinarily levied on an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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