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TMI Blog2016 (12) TMI 1680X X X X Extracts X X X X X X X X Extracts X X X X ..... 46 of 2016 - - - Dated:- 14-12-2016 - Deepak Gupta, C.J. and Sanjay Agrawal, J. Shri Vinay Pandey, Advocate, for the Appellant. Shri M.P. Devnath and Raja Sharma, Advocates, for the Respondent. ORDER [Order per : Deepak Gupta, C.J.]. - This appeal by the Revenue (Appellant-Commissioner, Central Excise, Customs Service Tax) arises out of the order dated 30-11-2015 passed by the Customs, Excise Service Tax Appellate Tribunal, New Delhi, whereby the appeal filed by the Revenue was rejected and the assessee was held entitled to claim Modvat credit on the inputs used for making capital goods in the nature of M.S. Plates, M.S. Channels, M.S. Joists, etc. 2. The assessee is engaged in the manufacture of cement. The assessee is availing Modvat credit on various inputs used in making capital goods in terms of Rule 57Q, now re-numbered as Rule 2(b) of the Cenvat Credit Rules, 2002 (hereinafter referred to as the Rules of 2002 in short). The respondent was using inputs in the nature of M.S. Plates, M.S. Channels, Joists, etc. for erection of Coal Hoppers, Ducting for Bag Filter, Conveyor Belt, Duct for Colling, Venting Exhaust Charge air for D.G. set for Coal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods under Rule 2(g) of Cenvat Credit Rules, 2002 and the said items cannot be considered as capital goods under Rule 2(b) of the Cenvat Credit Rules as the same are not machines, machinery, equipment, spare parts, components or accessories of capital good used for manufacture of final product. In other words, there is no dispute about the usage of the impugned items. The only dispute relates to admissibility of Cenvat credit on impugned items. While taking note of the submissions of the appellant referred to at Para 5(ii)(a) supra, I have also perused the following decisions of my learned predecessors on the subject, which have been relied upon by a couple of appellants in similar sets of appeal : (1) Order-in-Appeal No. 431-433/RPR-I/2003, dated 12-9-2003 (2) Order-in-Appeal No. 532-533/RPR-I/2003, dated 19-11-2003 (3) Order-in-Appeal No. 87/RPR-I/2005, dated 11-8-2005 xxxx xxxx xxxx xxxx xxxx 13. If one reckons the functional usage as submitted by the appellant and referred to at Para 4(i) supra, the appellant have used the inputs for manufacture of capital goods including Captive Thermal Power Plant, which were in turn used in the factory for the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .), the Apex Court have held thus .... the aforesaid definition of capital goods is very wide. Capital goods can be machines, machinery, plant equipment, apparatus, tools or bringing about any change in any substance for the manufacture of final product would be a 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 purpose enumerated therein would also be capital goods and qualify for Modvat credit entitlement.... . 5. Therefore, what the Appellate Authority, i.e., the Commissioner (Appeals) has held is that these M.S. Plates, M.S. Angles, M.S. Channels, M.S. Joists, etc. were used for the erection of certain parts of the factory which were essential for the manufacturing of cement. They are integral part of the cement factory and cement could not be manufactured without these parts being constructed. Therefore, the inputs used in the manufacture of these parts of the capital goods qualify for Cenvat credit. 6. The main argument raised is that the user test as laid down in the case of Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III, 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise, Raipur, 2015 (319) E.L.T. 247 (S.C.), the Apex Court dealing with the Rule 57Q of the Central Excise Rules, 1944, held as follows : 12. In the process, the court also explained that there is no warrant for limiting the meaning of the expression in the manufacture of goods to the process of production of goods only. In the opinion of the court, the expression in the manufacture takes within its compass, all processes which are directly related to the actual production. It noted that goods intended as equipment for use in the manufacture of goods for sale are expressly made admissible for specification. The court further marked that drawing and photographic materials falling within the description of goods intended for use as equipment in the process of designing which is directly related to the actual production of goods and without which commercial production would be inexpedient must be regarded as goods intended for use in the manufacture of goods . xxxx xxxx xxxx xxxx xxxx 17. The aforesaid process squarely meets the test laid down by this court in M/s. J.K. Cotton Spinning Weaving Mills Co. Ltd. s case. It is clear that the railway tracks are instal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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