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TMI Blog2023 (12) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate furnished by the Appellant. The CE certificate certifies the end use of such plates by the Appellant viz. plates were used as components, parts or accessories of Kiln, Milling Machine, Coke Oven Gas, Pollution Control Equipment, Storage Tank, Kiln, etc. - the adjudicating authority has not given any valid reason for rejecting the CE certificate. Further, in this case the plates were not used as building materials for constructing factory shed, etc. They are used in construction of machinery, which are capital goods. Therefore, the credit on such plates cannot be denied. The impugned order has relied upon Notification No. 16/2009-CE (NT) dated 7.7.2009 which amended explanation 2 to Rule 2(k) of the CCR, 2004 to specifically exclude angles, channels, TMT bards used for construction of factory and laying of foundation or making of structures for support of capital goods - the 'plates' are inputs for the capital goods and hence they are eligible for the credit availed on the 'plates' as 'inputs' - the demand confirmed in the impugned order is not sustainable. Since the demand itself is not sustainable, the question of demanding interest or imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) of the CCR, 2004. Plates classifiable under Chapters 84 and 85 directly fall under sub-clause (i) of clause (A) of the term capital goods as defined under Rule 2(a) of the CCR, 2004. Further, plates falling under Chapter 69, being refractory material fall under sub-clause (v) of clause (A) of the said Rule 2(a). The impugned order has denied the entire credit without going into the detailed submissions made by them in the reply to the SCN wherein it was categorically indicated that the SCN was issued without taking into account the supplier invoices evidencing the Chapter Headings under which the plates are classifiable and received by the Appellant. Accordingly, credit of Rs. 1,28,90,681 ought to have been held as eligible and to such extent the impugned order ought to be set aside. 5. As regards the remaining credit availed on goods falling under Chapters 72, 73 and 74, the Appellant has furnished a certificate from the Chartered Engineer certifying the end use of certain plates. As per such certificate, the plates falling under Chapter 72 and 73 were used for the following purposes: a. Part of equipment of motor and gear box, coke oven gas, milling machine, tundis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj.) wherein it has been categorically stated that where any particular process is integrally connected without which manufacturing is not viable, then the goods which are used therein will be eligible for availment of credit. The impugned order has relied upon Notification No. 16/2009-CE (NT) dated 7.7.2009 which amended explanation 2 to Rule 2(k) of the CCR, 2004 to specifically exclude angles, channels, TMT bards used for construction of factory and laying of foundation or making of structures for support of capital goods. In this regard, the Appellant submitted that the plates in question were not used for foundation, construction of factory or support structure. Hence, denial of credit on such basis is an erroneous assumption and is thus, unsustainable. 8. In support of their contention, the Appellant placed their reliance on the following judgments wherein it has been held that goods used for manufacturing any part, component, accessory or support structure of capital goods also falls within the definition of capital goods as per the user test, since it becomes an integral part of capital goods, which facilitates its functioning and thus credit thereon is eligible: a. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the term capital goods as defined under Rule 2(a) of the CCR, 2004. We agree with the submission of the Appellant. In the impugned order credit has been denied on many items which are classifiable under Chapter 84 and 85 also. They fall under the definition of capital goods under Rule 2(a) of the CCR, 2004 and hence they are entitled for the credit as 'Capital goods' 13. As regards the remaining credit availed on goods falling under Chapters 72, 73 and 74, we observe that the Appellant has furnished a certificate from the Chartered Engineer certifying the end use of certain plates. We observe that the impugned order has erroneously held that the plates are used in factory shed, construction of building foundation etc. and dismissed the CE certificate furnished by the Appellant. The CE certificate certifies the end use of such plates by the Appellant viz. plates were used as components, parts or accessories of Kiln, Milling Machine, Coke Oven Gas, Pollution Control Equipment, Storage Tank, Kiln, etc. We observe that the adjudicating authority has not given any valid reason for rejecting the CE certificate. Further, we observe that in this case the plates were not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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