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TMI Blog2021 (7) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules, 2002, or Cenvat Credit Rules, 2004. Therefore the argument of the Learned Counsel that the decision made with reference to earlier rules will also be applicable to the disputes involving of subsequent Cenvat Credit Rules, is misplaced. The Cenvat Credit Rules have evolved over the period 2000 to 2004 and the ratio of the decision made with reference to Cenvat introduced vide Notification No 27/2000(NT) cannot be straight away applied to the subsequent rules without due examination - Hon ble Apex Court never had the occasioned to compare the Modvat Rules with Cenvat Credit Rules, 2004 under which the present dispute lies. This fundamental issue if the area under pipeline and SBM lies in the factory premises or otherwise is also pending before original adjudicating authority. Thus, the impugned order is set aside and matter is remanded to original adjudicating authority to decide afresh, after a decision is taken on the issue of registration which has been remanded by tribunal to the original Adjudicating Authority. Appeal allowed by way of remand. - Excise Appeal No. 11661 of 2013 - A/12273/2021 - Dated:- 6-7-2021 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted only for The area excluding SBM to Essar Oil limited . Thus the JAC denied the request to include the area under pipeline and the SBM in the requested premises. Against the said decision the appellant filed an appeal before Commissioner (Appeals), who rejected the same on the ground that no appeal is maintainable against the said order. 2.4 Thereafter an appeal was filed by the appellant before tribunal. Tribunal remanded the matter back to Assistant Commissioner to decide on merit. No order has been passed till date in the remand proceeding by the Assistant Commissioner. 2.5 The appellant had meanwhile taken credit of duty paid on pipe used in transporting crude from SBM to refinery. The SBM is used to transport the liquid cargo from very large crude carriers anchored near the SBM to their refinery. The appellant s were issued Show cause notice seeking to deny Cenvat credit availed by them on the pipelines used to connect the SBM with the main refinery on the ground that the said pipes did not qualify as capital goods as defined under rule 2(a) of CCR, 2004 as they were not Used in the factory of manufacture of final products . The learned counsel argued that the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat scheme prescribed in Rule 2(a) of CCR, 2004 that credit would be admissible only to the goods used in the factory by the manufacturer. 3.1 Learned Authorized Representative argued that capital goods as defined in the Cenvat Credit Rules,2004 do not include any goods used outside the factory of the manufacture of final products, except those used for generation of electricity or for pumping of water for captive use within the factory. 3.2 He argued that the decision relied upon by the appellant in the case of Reliance Industries (supra) was given in the context of old Modvat rules wherein there was no such restriction of use within the factory of manufacture for availing Modvat credit. He also pointed out that the decision of Hon ble Apex Court in the case of Madras Cement Ltd and also relied on the decision in the case of Vikram Cement. 4. We have considered rival submissions, we find that the issue before us is if Cenvat credit of capital goods namely pipeline, used to connect the SBM with the refinery is admissible under Cenvat Credit Rules or otherwise. The fundamental ground for denial of Cenvat credit is that the pipeline is located outside the factory premises a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances and the judgments so referred above, that appellants case fall within the ambit of Capital goods and therefore, entitled for the benefit so claimed. we are inclined to observe that the expression used in the manufacture of goods take within its ambit in integral process and equipment connected with its ultimate production of goods. The material, equipments, in question is integral part of the manufacturing process and hence falls within the ambit of capital goods . Merely because SPM system is not specifically within the factory, but it is outside the factory, still required to be treated as capital goods used for manufacturing of final products, in the facts and circumstances of the case. Hence the order: ORDER (i) In view of above, we are inclined to answer the following question in law in negative: (a) Whether in the facts and circumstances of the case CESTAT was correct in denying the credit on SPM system under Rule 57Q of the Central Excise Rules, 1944 ii) The appeal is allowed iii) There shall be no order as to costs. 4.3 Learned Authorized Representative has argued that the decision in the case of Reliance Industries Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate Modvat/ Cenvat Rules. In order to get a clear finding on the issue, all the matters are remanded to the respective original authorities for decision only on the above issue. 4.6 Learned Counsel has relied on the decision of the Hon ble Apex Court in the case of Vikram Cement Limited 2006 (194) ELT 3. In the said decision Hon ble Apex Court observed as follows:- 21. Three reasons were given by the Court for holding that credit could be taken only on inputs received in the factory of the manufacturer of the final product. First, the court held that the definition of input given in sub- rule(d) of Rule 57AA was entirely different from the manner in which the said word had been expounded in the explanation to Rule 57A of the Modvat Rules . We cannot agree with this reading of the Section. As we have said there was only a re- arrangement of the several provisions of Rule 57B in Rule 57AA. Rule 57AA is in fact more broadbased than Rule 57B. 22. Second, the Court proceeded on the basis that under the Cenvat scheme there was no provision similar to Rule 57J of the Modvat Scheme. As we have seen,Rule 57J was replaced in substance by Rule 57AB.This provision was ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2002, or Cenvat Credit Rules, 2004. Therefore the argument of the Learned Counsel that the decision made with reference to earlier rules will also be applicable to the disputes involving of subsequent Cenvat Credit Rules, is misplaced. The Cenvat Credit Rules have evolved over the period 2000 to 2004 and the ratio of the decision made with reference to Cenvat introduced vide Notification No 27/2000(NT) cannot be straight away applied to the subsequent rules without due examination. 4.8 Hon ble Apex Court never had the occasioned to compare the Modvat Rules with Cenvat Credit Rules, 2004 under which the present dispute lies. 5 As detailed in Para 4.1 above the root of the dispute is if the pipeline and Single Buoy Mooring (SBM) are part of factory or not. This fundamental issue if the area under pipeline and SBM lies in the factory premises or otherwise is also pending before original adjudicating authority. Thus, the impugned order is set aside and matter is remanded to original adjudicating authority to decide afresh, after a decision is taken on the issue of registration which has been remanded by tribunal to the original Adjudicating Authority vide order No A/10377/20 ..... 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