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TMI Blog2019 (2) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs/ capital goods for availing credit. The final product in the present case is the sponge iron for which the kiln, burning chamber, conveyor gallery, fabrication of walkways of platform, staircases, shed, etc. are the essential machineries. As per appellant, none of these machinery can put to use unless and until the impugned structure is there to support the said machinery as the machinery cannot be held suspended in the air. Thus, these structures are not merely the structural support to these machines but very much become the integral part of these machines manufacturing the final product. Once, the documents in the form of certificates and even in the form of designs and layout were already produced on record at the first sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose is that the appellant is engaged in manufacture of sponge iron and is also availing credit on various capital goods as well as inputs. The Department on the basis of the intelligence observed that the appellant availed cenvat credit on various structural items (as above) which are used in factory premises for the fabrication of supporting structures of kiln, burning chamber, conveyor gallery, fabrication of walkways of platform, staircases, shed, etc. Alleging the same as the wrongly availed cenvat credit that SCN No. 1519 dated 07.02.2006 was served upon the appellant proposing the recovery of ₹ 25,95,873/- as allegedly wrongly availed cenvat credit alongwith the interest at the appropriate rate and the proportionate pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n error has been committed by Commissioner(Appeals). It is further impressed upon that even in the absence of decision of Chhattisgarh High Court that initially the Department itself vide the earlier Order-in-Original dated 26.03.2008 had granted the benefit of credit treating the disputed articles as the inputs. It is impressed upon that the impugned articles have been used no doubt to create a foundational support but for such machinery of the appellant without which the final product i.e. the sponge iron cannot be manufacture and the machine manufacturing the final product cannot function without the said support. Resultantly, the authorities at the second round of litigation have committed an error while ignoring the principle of user t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar steel structures used in fabrication of supporting structures if are merely the civil structures for supporting the machines/ apparatus used in manufacture of final product stands excluded from the definition of capital goods. But if such structures satisfies the user test principle as appreciated by Hon ble Apex Court in Rajasthan Spinning Weaving Mills Ltd. (supra) case, all these structural items are as good as spare parts of the capital goods as mentioned in Clause 3 of Section 2(a) of Cenvat Credit Rules, 2004 and thus are eligible inputs/ capital goods for availing credit. The final product in the present case is the sponge iron for which the kiln, burning chamber, conveyor gallery, fabrication of walkways of platform, st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Order. Once, the documents in the form of certificates and even in the form of designs and layout were already produced on record at the first stage of litigation it was highly unreasonable on part of the Commissioner(Appeals) to reject the Appeal merely on the ground of lack of the primary evidence as that of Chartered Engineer s Certificate, designs and layout etc. Also there was produced a report of Superintendent, Central Excise Range, Raigarh dated 11.09.2007 at the first round of litigation itself. It was verified in this report as well that concerned capital goods/ supporting structures are essential part of the plant and machinery without which the sponge iron plant cannot function and consequently final product cannot be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case is covered by the decision of the Hon ble Madras High Court in appellant s own case as referred above. We have also noticed that the Hon ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills Ltd. (supra) allowed Modvat credit on MS channels, steel plants etc. as capital goods used for erection of chimney for diesel generating set. The findings of the Commissioner that these are structures fixed to earth with concrete foundations and are immovable appears to be beyond the scope of the show cause notice. So, the case of M/s. Triveni Engineering Industries Ltd. 2000 (120) ELT 440 (Tri.-LB) as relied upon by the learned AR is not applicable in the present case. 6. In view of entire above discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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