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TMI Blog2023 (8) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... erusal 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 [Rule] 2(k) of Cenvat Credit Rules, 2004 and both circulars have no concern for the period in issue. Thus, the reliance placed by the Revenue in this regard has no substance. The Madras High Court in THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. INDIA CEMENTS LIMITED OTHERS [ 2011 (8) TMI 399 - MADRAS HIGH COURT] noticed VANDANA GLOBAL LTD. VERSUS CCE [ 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] but relied upon the Apex Court judgment in COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS LTD. [ 2010 (7) TMI 12 - SUPREME COURT] , wherein the Apex Court has considered an issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set and after considering it, the Apex Court allowed the Cenvat credit on MS Rod, sheets, MS Channel, MS Plate, etc., used for fabrication of structures to support various machines/capital goods. The facts of the present case are squarely covered by the above mentioned judgements of the Hon ble High Courts - the impugned order cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The show cause notice proposed denial of CENVAT Credit based on the Explanation 2 as amended vide Notification No.16/2009-CE (NT), dated 7-7-2009 by inserting the words but shall not include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods with effect from the date of publication of the Notification. The whole of the Credit taken pertains to the period prior to the above amendment as the Credit taken in March, 2010 was in respect of the inputs received in April, 2008. 3. The learned Adjudicating Authority vide the impugned Order-in-Original has allowed the credits attributable to structures under pollution control equipment, structures under storage tanks structure under component/accessories of capital goods. However, he has denied the credit to the Appellant on supporting structures for different capital goods and machineries. The said denial of credit against the inputs utilized in the fabrication of support structure is on the grounds that the credit on inputs utilized for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the Tribunal in Vandana Global Ltd. v. Commissioner of Central Excise Raipur [2010 (253) E.L.T. 440], has held that the amendment introduced vide the notification dated 7-7-2009 was a clarificatory amendment and was applicable retrospectively. His submission is that it was the amended Explanation 2 to Rule 2(k) as also the interpretation rendered by the Tribunal in Vandana Global (supra) that was applied by the Adjudicating authority to hold that the Appellant is not entitled to claim CENVAT credit on MS Plates, MS Channels, H.R. Coils, MS Angles, etc., as they are not inputs. 8. It has been contended by the Ld.Advocate for the Appellant that Hon ble Gujarat High Court in Mundra Ports Special Economic Zone Ltd. v. C.C.E. Customs [2015 (39) S.T.R. 726 (Guj.)], and Hon ble Madras High Court in India Cement Ltd. v. CESTAT, Chennai [2015 (321) E.L.T. 209 (Mad.)] and Thiru Arooran Sugars v. CESTAT, Chennai [2017 (355) E.L.T. 373 (Mad.)] have held the judgment of Vandana Global (supra) not a good law. Therefore, the reasoning of the Adjudicating authority, which imposed the demand along with interest and also penalty on the Appellant, by relying upon the amendment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (emphasis supplied) 12. Definition of input under Rule 2(k) was amended vide notification dated 7-7-2009. Amended provision inserted following clause in Explanation 2 by Cenvat Credit (Amendment) Rules, 2009 with effect from 7-7-2009:- but shall not include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, in building or laying of foundation or making of structures for support of capital goods 13. Consequently, w.e.f. 7-7-2009, Explanation 2 to Rule 2(k), as a whole, reads as under:- Explanation 2. - Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer but shall not include cement, angles, channels, Centrally Wasted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory, shed, building or laying of foundation or making of structures for support of capital goods. (emphasis supplied) 14. It may be noted that the Rule 2(k) was further substituted by Notification No.3/2011-C.E. (N.T.), dated 1-3-2011 and a specific exclusion was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Cement (supra) noticed Vandana Global (supra) but relied upon the Apex Court judgment in Rajasthan Spinning Weaving Mills Ltd. (supra), wherein the Apex Court has considered an issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set and after considering it, the Apex Court allowed the Cenvat credit on MS Rod, sheets, MS Channel, MS Plate, etc., used for fabrication of structures to support various machines/capital goods. 17. In Thiru Arooran Sugars (supra), a Division Bench of the Madras High Court specifically considered as to whether MS structural, (which support plant and machinery), cement and steel (which are used in erecting foundations to hold plant and machinery) are integral part of capital goods eligible for Cenvat credit under the Cenvat Credit Rules, 2004 prior to the amendment of Explanation 2 to Rule 2(k) by notification dated 7-7-2009. The Madras High Court has held that irrespective of whether user test is test applied, or the test that they are an integral part of the capital goods is applied, all such items fell within the scope and ambit of both Rule 2(a)(A) and 2(k) and, therefore, Cenvat credit was to be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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