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TMI Blog2019 (12) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2004, same also becomes capital goods - the goods which are denied CENVAT Credit in these appeals are such without which the capital goods/inputs relevant to manufacture the final product cannot function. Thus, the goods under question also became the capital goods. There is no denial for the rails/sleepers to partly within the manufacturing unit/factory of appellant. Irrespective it extends outward but admittedly is used for the transport of rawmaterial inside the factory for manufacturing final product. Thus is the part and parcel for the manufacturing unit composed of capital goods which cannot function without these rails - further, there is no evidence on record to show that any of the capital goods as that of pipes, pumps etc. or other steel structures as mentioned in the above tables to have been used in construction of factory shed or for laying of the foundation. Those rather appear to have been used in connecting the machinery installed in the factory premises of the appellant which is meant for manufacture of the final product or are such as have been used as an integral part thereof. Hon ble Apex Court in the case of VIKRAM CEMENT VERSUS CCE, INDORE [ 2006 (2) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. - Excise Appeal No. 450 of 2011, 624 of 2011, 2344 of 2011 [DB] - A/31156-31158/2019 - Dated:- 24-12-2019 - HON BLE MR. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) AND HON BLE MRS. RACHANA GUPTA, MEMBER (JUDICIAL) Shri Shankar Bala, Chartered Accountant for the Appellant Shri A.V.L.N. Chary, Superintendent for the Respondent ORDER RACHNA GUPTA The present is the common order disposing three appeals, appellant issue involved in these appeals being common. The facts in brief relevant for adjudication of present appeal are as follows: The appellants herein are engaged in manufacture of iron and steel products and their unit was still under construction at the time of the show cause notice. The appellant also availed CENVAT Credit on capital goods and input services. During the scrutiny of ERI Returns of the assessee, it was observed by Superintendent of Central Excise Proddatur Range that during the month from September, 2008 to June, 2009, the appellants have taken the CENVAT Credit on rails falling under Chapter 73 of the Tariff. The said rails have been utilised in the construction of railway-line from Muddanur Railway Station to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring in the plant. Such components and parts of machines are eligible for the credit. It was also held therein that the railway track materials needed for transporting fuel are essential for manufacturing in plant. Also railway-track used for transportation of coal product of cement. Since without supply of fuel the plant does not function and, therefore, railway track cannot be kept out of consideration for availing moderate credit. The same is not being used directly for the manufacture of cement is held irrelevant consideration. 3. Learned Counsel for appellant further impressed upon that the adjudicating authority below has denied the CENVAT Credit on the rails holding that they have not been listed under the definition of capital goods. But this argument for the period prior to 07.07.2009 is not sustainable in law. The credit on such structural items can be denied only after 07.07.2009 that too when such structures are used for laying foundation and for building supporting structure. None is the case with respect to rails in the present case. It is further submitted that the adjudicating authority has wrongly relied upon the decision of the larger bench of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plant cannot be accepted as definition does not allow credit on parts of plant but only on parts of machinery and parts and accessories thereto [para 58] 5. That it is not included in the inclusive part of the definition of capital goods [para 59] b. Flange Pipe, valve and bends, sluice valve, moor pumps, hydrant valve and ball valve etc., which was used in the construction of Pipeline for drawing water from Mylavaram Dam to the Factory Premises. The length of the pipeline is 15 kms. Same findings as above for credit availed on inputs used in construction of Pipeline for drawing water. c. Capital goods viz.l steel tubes, cables, weigh bridge equipments, transformer copper wound, power distribution, structural steels, starter panels, cement, EOT cranes, Electronic weighing machine, voice and data components, water treatment and foundation bolds. 1. The details regarding usage of goods have not been furnished as some of the items are general purpose items like structural steel and could be used outside the factory premises. 2. That structural steels, cement etc., have not been specifically liste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the railway line is to be considered as extension of the factory. It was not argued/established that such railway line constitute one integral unit together with the factory of the assessee. [para 58] 4. The railway line being part of the plant cannot be accepted as definition does not allow credit on parts of plant but only parts of machinery and parts and accessories thereto [para 58] 5. That it is not included in the inclusive part of the definition of capital goods [para 59] b. Credit availed on various capital goods when the assessee s unit is still under construction and no production of goods is taking place at the present. 1. That the assessee has not furnished any details/evidence regarding usage of the goods within the factory of production. 2. That credit is availed on structural steels, cement which is not covered under the definition of capital goods under Cenvat Credit Rules, 2004. c. Inputs service 1. Relies on the decision of Maruti Suzuki Ltd., 2009 (240) ELT 641 (SC) to hold that the inclusive part of the definition should also satisfy the ingredients of the main par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam [or pumping of water] for captive use; or (iv) all goods used for providing any [output service; or] (v) all capital goods which have a value upto ten thousand rupees per piece,] but excludes- (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for- (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Act;] (C) capital goods, except when- (i) used as parts or components in the manufacturer of a final product; or (ii) the value of such capital goods is upto ten thousand 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se law relied upon by the learned Counsel for appellant support our findings. Further we find that there is no evidence on record to show that any of the capital goods as that of pipes, pumps etc. or other steel structures as mentioned in the above tables to have been used in construction of factory shed or for laying of the foundation. Those rather appear to have been used in connecting the machinery installed in the factory premises of the appellant which is meant for manufacture of the final product or are such as have been used as an integral part thereof. 10. Adjudicating authority below has given the amendment of 07.07.2009 the retrospective effect relying upon the decision of Vandana Global (supra), but we observe that the said decision is no more a good law. Honble High Court, Gujarat in Mundra Ports Special Economic Zone Ltd. Vs. CCE reported as 2015 (39) STR 726 (Guj.) has already held that the amendment made in CENVAT Credit Rules, 2004 which came into force on 07.07.2009 was not clarificatory amendment. Hence, the amendment could operate only prospectively. The opinion of larger bench in Vandana Global (supra) has been held to be based on conjectures and surmises. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2004. The issue with respect to the rails/sleepers and the impugned other goods has already been decided in number of times, in favour of assesses. Tribunal, Hyderabad in Ultratech Cement Ltd. 2016 (339) ELT 127 has held that Monoblock Concrete Sleepers for rail track are eligible Cenvatable goods. Similar view has been taken by Tribunal, Delhi in the case of Jindal Steel Power Ltd. Vs. CCE, Raipur 2016 (343) ELT 608. Tribunal, Kolkata in the case of TATA Steel Ltd. Vs. Commissioner of Central Excise, Jamshedpur 2016 (335) ELG 303 has in addition held that the railway sliding even it leads outside the factory premises but are the part and parcel of facility for transport provided inside the factory premises and the assessee are thus eligible for CENVAT Credit thereupon. Hon ble Apex Court in the case of Vikram Cement Vs. Commissioner of Central Excise, Indore 2006 (197) ELT 145 (SC) has held that the repair and maintenance of pumps and pipes outside the factory premises having nexus with the manufacture of final products even if utilised outside the factory premises would be eligible for CENVAT Credit . Seen from all these decisions and for no evidence by the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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