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TMI Blog2020 (1) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... are excisable goods and which must be either manufactured or produced for this charging section to apply. If these elements are missing, the activity falls outside the scope of this Act. The key terms used in the charging section are excisable goods , manufacture and production . Excisable goods is defined in Section 2 (d) and manufacture in section 2 (f). The term production is not defined in the Act and neither is the term goods . Central Excise Registration is required for a manufacturing facility and not for any facility owned by the manufacturer. If there are more than one manufacturing facilities, each of these require a separate registration. In fact, the appellant themselves have two registrations. There are cases where the same factory is split on to opposite sides of a road or pipeline or railway track. In such cases, effectively, it is the same factory with different parts of it working on either side. For such cases, CBEC s manual instructs that a single registration may be given - The present case is not one such. It is case where the assessee has a registered manufacturing facility and a facility 48 km away where no manufacturing but only some processing (which undis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etkata, Dibrugarh, Assam and their associated units are at Duliajan, Lakwa and Tinsukia which carry on certain activities. The units located at Duliajan and Lepetkata fall within the same jurisdiction of the same Central Excise Commissionerate, though under different ranges. 3. Another unit of the Appellant is at Lakwa where C2+Liquid is manufactured and transferred to the Lepetkata for which they have taken separate Excise Registration of Lakwa Unit as dutiable goods are being manufactured. 4. Their Duliajan unit is a gas compression and dehydration unit (hereinafter referred to as 'GDU') where they purchase natural gas from Oil India Ltd, compress it and dehydrate and transfer it to their Lepetkata unit located 48 km away through a 18 inch pipe for use in manufacture of dutiable polymers. The gas which is left after manufacture (lean gas) is again sent by their manufacturing unit at Lepetkata unit to the Duliajan unit which pumps it back into the Oil India Ltd. 5. Thus, in their Duliajan plant they only compress and dry the gas and do not create any new marketable commodity and they are also not registered with the central excise department. They also receive the lean gas a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt:30.03.2010, on payment of Customs Duty including total CVD + Addl.Duty ₹ 21,125/-. 30.08.2011 Filing of B/E No:4504712 & 4504801 by BHEL at JNPT for the consignment of Gas Turbine Package imported by them against M/s.BCPL's order dt:30.03.2010, on payment of Customs Duty including total CVD + Addl. Duty ₹ 21,125/-. 26.09.2011 Despatch of consignments comprised in B/E NO.:4504581 vide L/R No:71271 ex-JNPT after clearance on payment of Customs Duty and Addl. Duty/CVD. 26.09.2011 Despatch of consignments comprised in B/E No.3413437 dt:05.05.2011, 4008060 dt: 07.07.2011 & 4504712 dt: 30.08.2011 vide L/R No:71272 ex-JNPT after clearance on payment of Customs Duty and Addl. Duty/CVD. 30.09.2011 BHEL's (importer's) invoice No: ID-HY-3010867 for the Gas Turbine Package covered under BCPL's PO dt:10.05.2010 and dispatched ex-JNPT to BCPL Duliajan vide LR No:71271 and 71272 both dated 26.09.2011, involving Addl. Duty/CVD of ₹ 18,54,88,945/-. 25.11.2011 Filing of Application by M/s.BCPL for Registration U/r-9 CER 2002 as manufacturer of excisable goods with Superintendent CE Dibrugarh. 27.12.2011 Filing of B/E No: 5576147 by BHEL at JNPT for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent C.E. Dibrugarh for inclusion in C.Ex Registration of BCPL Lepetekata amongst three connected installations of the Compressor (GDU) Station Duliajan. Requisite clarification furnished to ACCE Dibrugarh. 18.05.2015 Filing in the office of Commissioner CE Dibrugarh by BCPL (in furtherance to initial request dt:03.03.2012 and further clarifications dt:03.02.2014 and 22.04.2015) of the letter furnishing documents about commonality of work force, management, Sales Tax & Income Tax Assessment and Connectivity of operations of the three sites/ installations at Lakwa, Duliajan and Lalmati Rly. Sdg.. Copies of the letters marked to Addl. Commissioner C.E. Dibrugarh. 17.12.2015 Assistant Commissioner, O/o Commissioner C.E. Dibrugarh's letter to BCPL Lepetkata referring their letter dt:18.05.2015 and communicating that Commissioner C.E. rejected the request for common C.Ex. Registration for three Addl. premises purportedly on the ground of segregation by public road/Railway Line and non satisfaction of conditions vide para-6 Chapter-2 of C.Ex. Manual. 18.12.2015 BCPL's letter to the Department regarding confirmation as to whether the activity undertaken at Duliajan Installation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt:06.07.2017) praying for carry forward of the CENVAT Credit on Capital goods installed at: -Lakwa (Gas Sweetening & C2+Recovery Plant), -Duliajan (intake of Natural Gas and de-hydration Compression and Pumping the main CNG inputs directly to Lepetkta Plant), -Lepetkta Plant turning out the final products, HDPE, LLDPE and PPE. -and Tinsukia Rly. Sidg. (uploading Naptha input and pumping the same to Lepetkta Plant). -The request was accompanied with Diagrammatic representation of integrated manufacturing processes spread over the four installations and justification for Single Registration. 15.07.2017 BCPL's letter to Commissioner CGST, C & CE Dibrugarh, referring to the deliberations of the meeting dt:06.07.2017 emphasizing the factors justifying single registration namely, (i) All installations were under jurisdiction of CE Range. (ii) Processes undertaken at each installation inseparably intertwined and interconnected with the other. (iii) None unit operating under any area based exemption. (iv) Entire accounting movement and record keeping relevant for the purpose being at one place - Lepetkta. And offering further justification for Single Registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts for further manufacture in their Leptkata plant and both are connected through their own 48 km pipeline and hence both should be given one registration regardless of the fact that they are located far from each other and they are also located in different range offices of the Commissionerate. He relies on the CBEC's manual chapter2 para 3.2 of which reads as follows: "3.2 Separate registration is required in respect of separate premises except in cases where two or more premises are actually part of the same factory (where processes are interlinked) but are segregated by public road, canal or railway-line. The fact that the two premises are part of the same factory will be decided by the Commissioner of Central Excise based on factors, such as: (1) Interlinked process product manufactured/produced in one premises are substantially used in other premises for manufacture of final products. (2) Large number of raw materials are common and received/proposed to be received commonly for both/all the premises. (3) Common electricity supplies. (4) There is common labour/work force. (5) Common administration/work management. (6) Common sales tax registration and ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied. - (1) There shall be levied and collected in such manner as may be prescribed, - (a) a duty of excise to be called the Central Value Added Tax (CENVAT)] on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods excluding goods produced or manufactured in special economic zones specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule. Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured,- (i) Omitted. (ii) by a hundred per cent export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) of which defines 'goods' as follows: "goods" means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; 18. Thus, for the excise duties to apply, they must be "goods" in terms of the above definition and the goods must be "excisable goods" and they must be either manufactured or produced. The definition of 'manufacture' in section 2(f) is an inclusive definition indicating what all elements need to be included in the manufacture. Through a series of judicial decisions, it is now well settled that every processing of goods does not amount to manufacture and only such processes which result in emergence of new distinct, marketable goods amount to manufacture. Else, excise duty cannot be levied as mere processing does not amount to manufacture. It is not open for the officers to treat any odd process as manufacture and to compel the processor to obtain registration and pay excise duty. Conversely, it is not open to the processor to say that he wants to call his process as manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de, holds private store-room or warehouse or otherwise uses excisable goods, shall get registered: Provided that a registration obtained under rule 174 of the Central Excise Rules, 1944 or rule 9 of the Central Excise (No. 2) Rules, 2001 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules. (2) The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration. (3) The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board." CBEC's manual chapter2 para 3.2 as applicable during the period: "3.2 Separate registration is required in respect of separate premises except in cases where two or more premises are actually part of the same factory (where processes are interlinked) but are segregated by public road, canal or railway-line. The fact that the two premises are part of the same factory will be decided by the Commissioner of Central Excise based on factors, such as: (1) Interlinked process product manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturing facility at Lepetkata. d) Conversely, it is also not open to the Revenue to compel registration of premises of any assessee where no manufacturing takes place even if such places are connected by pipes to a manufacturing facility. It is also not open to the Revenue to demand duty on the processing activities carried out at such premises even if they are connected by a pipe to actual manufacturing unit. e) The provisions relating to the Registration are in the CE Act and Rules and it is not open to this Tribunal to modify them or enlarge or constrict their scope. 23. In conclusion, we find in the given factual matrix that the appellant is not entitled to get their Duliajan processing plant included in their registration for Lepetkata manufacturing plant. CENVAT Credit. 24. The second issue to be considered is whether the appellant is entitled to the CENVAT credit on the capital goods and services received at their Duliajan plant even if it is not part of their registered premises. CENVAT credit is governed by the Cenvat Credit Rules, 2004 framed under Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Both these sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub- Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. 25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between 'strict interpretation' and 'literal interpretation'. We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler benches leaves us with no option but to interpret the Act and Rules as they were framed and applicable during the period without any intendment and regardless of the consequences. 27. Our role is to apply the Rules as they existed during the relevant period. Rule 2(a) of the CCR 2004 defines capital goods as below: "(a) "capital goods" means:- (A) the following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 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 fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; and (vii) storage tank, used- (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (2) for providing output service; (B) motor vehicle registered in the name of provider of output service for providing taxable service as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence between the CENVAT and MODVAT Rules and even in the absence of an explicit provision, credit of CENVAT of explosives is still available. The present case is completely different as the question is not with respect to MODVAT Credit/ CENVAT Credit on inputs but is the question of CENVAT Credit on capital goods. 31. Learned counsel also relied upon the judgement of the Apex Court in the case of Vikram Cement [2006 (197) ELT 145] in which it was held that MODVAT /CENVAT credit on capital goods used in captive mines which form an integrated unit with the factory is available. The ratio of this judgment does not apply to the present case as we have specifically examined the facts of this case and ruled that the processing plant at Duliajan is a separate processing plant and is not part of the manufacturing unit at Lepetkata. Further, we are also bound now by the five member Constitutional bench of the Supreme Court in the case of Dilip Kumar & Company (supra) which categorically held that fiscal statutes must be interpreted applying the Rule of plain meaning without any intendment and regardless of any consequences or hardships caused. 32. For these reasons, we find that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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