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TMI Blog2018 (2) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to Cenvat credit on the goods in question including welding electrodes, relying on the findings of Hon’ble Madras High Court in India Cement [2015 (3) TMI 661 - MADRAS HIGH COURT]. Extended period of limitation - Held that: - issue being wholly interpretational as there existed contrary judgments of this Tribunal, extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant. - E/146/2012-EX[DB] with CROSS Application No. E/CROSS/77/2012 & APPEAL Nos. E/145 & 1800/2012-EX[DB] - A/71972-71974/2017-EX[DB] - Dated:- 27-7-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Pradeep Kumar Mittal (Advocate), for Assessee Shri Rajeev Ranjan (Joint Commr.) AR, for Revenue Per: Anil Choudhary The issues in these appeal are whether the appellant-assessee, a manufacturer of Sugar, etc., is entitled to Cenvat credit on Steels goods such as Shape Section, angles, M.S. Plates/rounds, beams, rails etc. falling under Chapter Heading 72, 73 83 of CET Act, also welding electrodes used in fabrication/construction of capital goods including structural support, etc. The exclusions prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -original dated 31/3/10 by which the Assistant Commissioner confirmed the above-mentioned Cenvat credit demand alongwith interest and imposed penalty of equal amount on the appellant. This order of the Assistant Commissioner was upheld by CCE (Appeals) vide order-in-appeal dated 22/10/10 except for reduction of penalty to ₹ 20,000/-. In this order, the Commissioner (Appeals) held that the welding electrodes used for repair and maintenance are not eligible for Cenvat credit either as inputs or as capital goods and in respect of steel items, while observing that these items were used for fabrication of various mill house machinery such as Cane Carrier side plate and Leveller/Chopper Hoods, Bagasse Cilo Pipe, Bagasse Carrier, Sulphur Furnace, Juice Sulphiter, Pan Crystalizer, Juice Heater of Boiling House, Cable Tray and Motor Guard, ID Fans, Lime Slaker, Sugar Conveyor etc. and also for repair and maintenance of machines and erection of supporting structures for machinery, he denied the Cenvat credit on the ground that plant and machinery assembled at site cannot be treated as goods and hence these steel items would not be eligible for Cenvat credit, in view of judgment of Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Bagasse Cilo Pipe, Bagasse Carrier etc. being sugar mill machinery and, hence, covered by Chapter 84, would be eligible for Cenvat credit as input, as the definition of input also covers the goods used for manufacture of capital goods used in the factory of the manufacture. He, therefore, pleaded that the impugned order is not correct. 4. Shri R.K. Mishra, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and cited the judgment of Honble Andhra Pradesh High Court in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. vs. CCE, Tirupati reported in 2012 (278) E.L.T. 167 (A.P.), wherein it was held that welding electrodes used for repair and maintenance of the plant and machinery are not eligible for Cenvat credit. 5. I have considered the submissions from both the sides and perused the records. 6. So far as eligibility for Cenvat credit of the welding electrodes used for repair and machinery of the plant and machinery is concerned, this issue stands decided by the judgment of three High Courts, as mentioned above - judgment of Honble Rajasthan High Court in the case of Hindustan Zinc Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity without which though manufacturing activity may be theoretically possible, the same would not be commercially feasible. The question as to whether repair and maintenance is an activity distinct and separate from manufacture has nothing to do with the question as to whether repair and maintenance has nexus with manufacture. Looked at from criteria prescribed by the Apex court in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs. Sales tax Officer, Kanpur (supra), the activity of repair and maintenance has to be treated as having nexus with manufacture and hence any item used for repair and maintenance would be eligible for Cenvat credit. 7. As regards the use of the steel items, which according to the department, were used for fabrication of various items of plant and machinery, I find the Assistant Commissioner on this point has given a clear finding mentioning the names of various items, of components of sugar mill machinery for which these steel items were used. There is neither any allegation in the show cause notice nor any finding of the Assistant Commissioners order that the steel items were used for structural supports and hence the observation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing for the Revenue submitted that the judgment in the assessees own case reported in AIT-2011-358-HC (The Commissioner of Central Excise Vs. M/s India Cements Limited) had been appealed against, as of today, there are no details; in any event, the fact herein is that the Revenue does not controvert the facts found by the Assistant Commissioner that the impugned goods were used for fabrication of structurals to support various machines like crusher, kiln, hoppers, pre-heaters, conveyor system, etc. and that without these structural, the machinery could not be erected and would not function. 9. In the decision reported in AIT-2011-358-HC (The Commissioner of Central Excise Vs. M/s India Cements Limited), pointing out to Rule 57Q and the interpretation placed by the Apex Court in the decision in Commissioner of Central Excise Jaipur Vs. Rajasthan Spinning Weaving Mills Ltd .(Supra) and in particular Paragraph Nos. 12 and 13, wherein the Apex Court had applied the user test by following the Jawahar Mills s case, this Court held that steel plates and M.S. Channels used in the fabrication of Chimney could fall within the ambit of capital goods . In the face of this decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in respect of the very same assessee. 15. Accordingly, following the principles laid down in Commissioner of Central Excise Jaipur Vs. Rajasthan Spinning Weaving Mills Ltd. (Supra) and the earlier decisions of this Court in C.M.A. No. 3101 of 2005 dated 13.12.2012 and C.M.A. No. 1265 of 2014 dated 10.7.2014, we are inclined to allow the appeal, thereby set aside the order of the Tribunal. Accordingly, this Civil Miscellaneous Appeal stands allowed. No costs. Consequently. M.P. No. 1 of 2011 is closed. 6. The Ld. A.R. for Revenue have placed reliance on the impugned order. He further relies on the ruling of Hon ble Allahabad High Court in Daya Sugar Vs. CCE (2015) 316 ELT 394, wherein considering the allow-ability of Cenvat credit on chequered plates, packing plates, sheets, sections and staging materials for the period 3/2000 to 11/2000, under Rule 57Q of Central Excise Rules, 1944, wherein the appellant had taken credit based on suppliers invoices, and admittedly goods were used for constructing platforms for the use of running the machinery, and for supporting equipments used in factory, it was held as the items are used merely for raising civil structures, hence cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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