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TMI Blog2019 (8) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... KA HIGH COURT] no interest or penalty can be imposed upon the appellant. Reversal of CENVAT credit which has been taken before its utilization is as good as not taking the credit at all - Interest and penalty set aside. Demand of Central Excise duty - MS gratings - job-work - It is the case of the department that the appellant had got these MS gratings manufactured through job workers and they were, therefore, liable to pay central excise duty on these goods - assessee claims the goods to be capital goods and exempt from tax - HELD THAT:- It is true that as per the definition of capital goods in the CENVAT Credit Rules, 2004 only goods falling under Chapter 82, 84, 85 and 90 of the Central Excise Tariff are covered. However, components, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich they have availed on the input services during the period April 2006 to December 2006. Admittedly, they have not utilized the credit at all but had only availed the credit. The ground on which this credit is sought to be denied is that the services were used only in the manufacture of exempted products. On being pointed out by the Department, the appellant reversed the entire CENVAT credit on 10.1.2007 itself. Thereafter, the show-cause notice was issued to demand interest and impose penalty on the CENVAT credit so reversed. Learned counsel for the appellant submits that they are only contesting the demand of interest and imposition of penalty on this amount. 2. The second issue is the demand of Central Excise duty of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Learned counsel for the appellant argues that as far as the CENVAT credit is concerned, it was availed on the input services allegedly used in the manufacture of exempted products but the credit so availed was not utilized by them at all. Therefore, when the credit was availed but not utilized and reversed before any utilization, it is as good as not availing the benefit of CENVAT credit at all. Therefore, interest cannot be demanded under CENVAT Credit Rules, 2004 on such CENVAT credit nor any penalty can be imposed on them. He relies on the case law of CCE vs. Bill Forge Pvt. Ltd.: 2012 (279) ELT 209 (Kar.) in which the jurisdictional Hon ble High Court of Karnataka has held that when the CENVAT credit if availed but not utilize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the other. Therefore, the gratings are nothing but the capital goods used in the plant. He would urge that the original authority sought to reject that gratings are capital goods in view of the definition of Capital Goods under CENVAT Credit Rules, 2004 as follows: (A) The following goods, namely:- (i) All goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, [heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804] of the First Schedule to the Excise Tariff Act; (ii) Pollution control equipment; (iii) Components, spares and accessories of the goods specified at (i) and (ii); (iv) Moulds and dies, jigs and fixture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, no penalty is also imposable upon them. He relies on the following case laws: (i) Thiru Arooran Sugars vs. CESTAT: 2017 (355) ELT 373 (Mad.), in which the Hon ble High Court of Madras has held that MS structural which support plant and machinery, and cement and plant, which went into erecting foundations to hold plant and machinery are integral part of the capital goods and hence are eligible for CENVAT credit. (ii) Nava Bharat Ferro Alloys Ltd. vs. CCE: 2017 (358) ELT 145 (AP) in which CENVAT credit was allowed on columns of heavy fabricated structures and bracings used to support boiler, holding the same to be a part of the boiler. (iii) CCE vs. Singhal Enterprises Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behest outside the factory and supplied to them. It is also not in dispute that the gratings so manufactured have been used in their factory not in manufacture of final products but in providing structural support to their plant. It is the case of the Revenue that Central Excise duty has to be paid by the appellant on these goods which are manufactured by their job workers. The case of the appellant that no Central Excise duty is payable because these are capital goods used within the factory of manufacture and therefore, exempted vide Notification No.67/95-CE. This Notification exempts capital goods which are manufactured and used within the factory of manufacture. The department s case is that since these MS gratings fall under Chapter 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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