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TMI Blog2019 (6) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax, Lucknow, has been allowed and the order dated 30.7.2010 by which the demand was confirmed, has been set-aside. 3.Vide order dated 20.2.2019, the present appeal was admitted on the following three substantial questions of law:- "1. Whether the Customs Excise & Service Tax Appellate Tribunal, Allahabad is correct in setting aside the Order in Original dated 30/07/2010 ignoring the decision of this Hon'ble Court in case of Bajaj Hindistan Ltd. Vs. Union of India reported in 2013 (295) ELT 20 (All), on the same issue. 2. Whether the Customs Excise & Service Tax Appellate Tribunal, Allahabad is correct in ignoring the Circular No.966/09/2012-CX.1 dated 18/05/2012. 3. Whether the impugned Final Order dated 02/11/2017 passed by the Customs Excise & Service Tax Appellate Tribunal, Allahabad is not substantial as in terms of Rule 2 (k) of the Central Credit Rules 2004." 4.Shorn off unnecessary details, the facts of the case are as under : Respondent-assessee, M/s DSCL Sugar, is engaged in manufacturing sugar and molasses. It has availed Cenvet Credit Facility under Cenvat Credit Rules, 2002 upto 9.9.2004 and under Cenvat Credit Rules, 2004 w.e.f.10.9.2004. 5.During the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for credit. The Tribunal has also erred in law in not considering the fact that the Board has issued clarification vide Circular No. 966/09/2012-CX.1 dated 18.5.2012, in respect of Circular No. 964/07/2012-CX dated 2.4.2012, wherein it was reiterated that in terms of Rule 2 (k) of the Cenvat Credit Rules, 2004, while Cenvat credit is available in respect of parts of Boiler, the same is not admissible in respect of the 'structural components used for laying foundation or making structures for support of capital goods'. 12.Learned Counsel for the appellant-revenue has further contended that the Tribunal has erred in not applying the decision of this Court rendered in the case of Bajaj Hindustan Ltd. Vs. Union of India : 2013 (295) ELT 20 (All.), which is in favour of the department wherein it has been observed that Cenvat credit is not admissible on the inputs which were not used for manufacture of capital goods. 13.Per contra, Sri Rahul Agarwal, learned Counsel for the respondent has supported the decision of the Tribunal and has submitted that the respondent-assessee is manufacturer of sugar, molasses etc. which are excisable product. It takes CENVAT Credit on the excise duty/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctures for support of capital goods. 16.Learned Counsel for the respondent-assessee has submitted that a lager Bench of the CESTAT in Vandana Global Ltd. Vs. Commissioner of C.Ex. Raipur : (2010) 253 ELT 440, has held that the amendment introduced by the notification dated 7.7.2009 was a clarifactory amendment and was applicable retrospectively. His submission is that it was the amended Explanation 2 to Rule 2 (k) as also the interpretation by Vandana Glopal (supra) that was applied by the Adjudicating Authority to hold that the respondent is not entitled to claim CENVAT credit on MS Plates, MS Channels, H.R. Coils, MS Angles, Etc. as they are not inputs. 17.It has been contended by the learned Counsel for the respondent that the Gujarat High Court in Mundra Ports & Special Economic Zone Ltd. Vs. C.C.E. & Customs : 2015 (39) STR 726 (Guj.), the Madras High Court in India Cement Ltd. Vs. CESTAT, Chennai : 2015 (321) ELT 209 (Mad.) and Thiru Arooran Sugars Vs. CESTAT, Chennai : 2017 (355) ELT 373 (Mad.) have held the judgment of Vandana Global (supra) not good in law. Therefore, the reasoning of the Adjudicating Authority, which imposed the demand along with interest and also pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vs. C.C.E. & Cus. : 2015 (39) S.T.R. 726 (Guj.), and Thiru Arooran Sugars Vs. CESTAT, Chennai : 2017 (355) E.L.T. 373 (Mad.). 22.We have examined the submissions advanced by the learned Counsel for the parties and gone through the record. 23.The issue in hand pertains to the year 2004-05 and 2005-06, wherein the respondent-assessee, who is the manufacturer of V.P. Sugar and molasses, had procured CENVAT credit on items such as plates, shape & section, M.S. Angles, G.P. Coil/Sheet, H.R. Coil, C.R. Strip, M.S. Channels etc. The revenue issued a show cause notice proposing to disallow the credit on the ground that these items had been used either for repair and maintenance of plant and machinery or modification of their existing plant and machinery. The Original Authority, vide order dated 30.7.2010, disallowed the credit by holding that items used for repair and maintenance or modification of plant and machinery are not eligible for credit. It was also held that items embedded to earth are also not covered in the definition of capital goods and items of Chapter 72 and 73 are not eligible for the credit. 24.Not satisfied with the order dated 30.7.2010, the respondent-assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider rival submissions, first of all we would like to refer Rule 2 (k) of CENVAT Credit Rules, 2004 which defines "input". This Rule as framed initially in 2004, read as under: "2(k) "input" means all goods, except light diesel Oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes lubricating oils, greases, cutting oils coolants, accessories of the final products cleared alongwith the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production. Explanation 1. - The high-speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever.- Explanation 2. - Inputs include goods used in the manufacture of capital goods, which are further used in the factory of the manufacturer." (emphasis supplied) 28.Definition of "input" under Rule 2 (k) was amended vide notification dated 7.7.2009. Amended provision inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... housand rupees per piece;] (D)motor vehicles; (E)any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and (F)Any goods which have no relationship whatsoever with the manufacture of a final product. Explanation.- For the purpose of this clause, " free warranty means a warranty provided by the manufacturer, the value of which is included in the piece of the final product and is not charged separately from the customer]." 31.From perusal of the circulars dated 2.4.2012 and 18.5.2012, it comes out that these circulars have been issued in the changed context of the definition of Section 2 (k) of Cenvat Credit Rules, 2004 and both circulars have no concern for the period in issue. Thus, we find that the reliance placed by the revenue in this regard has no substance. 32.On going through the record, we find that the Revenue has relied upon the larger Bench decision of the Tribunal in the case of Vandana Global (supra), wherein it was held that the explanation added to the definition of capital goods w.e.f. 07.07.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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