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TMI Blog2024 (2) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of multiple products from Copper concentrate. During 2003 to 2005 the Appellants expanded the factory by installing additional machinery such as smelter, coal handling plant, Sulphuric acid plant etc. Such expanded portion of the factory was referred to as Copper III plant. The Appellants placed work orders on contractors for setting up of the Copper III plant. The Appellants inter alia purchased duty paid H.R. M.S. and S.S. plates for use by the contractor. The H.R. M.S. and S.S. plates were mainly used by the contractor in the fabrication of the following items in the factory of the Appellants: (i) Chimney (ii) Ducts (iii) Machinery (iv) Pipes (v) Support structures of capital goods (vi) Storage tanks Apart from the above, a small quantity of H.R. M.S. and S.S. plates was also used in fabrication of civil structures within the factory. 3.1 The Appellants during the period 2003 to 2005 consumed a total of 16270.59 MT of H.R. M.S. and S.S. plates for setting up of the Copper III plant. Out of the total quantity of H.R. M.S. and S.S. plates purchased, the Appellants availed Cenvat credit of duty paid on 5003.20 MT of H.R. M.S. and S.S. plates under the bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with a specific observation that adjudicating authority has not appreciated Chartered Engineers certificate in its correct perspective and therefore matters needs reconsideration. 3.3 Ld Counsel pointed out that In de-novo proceedings, Ld. Commissioner in the impugned order has confirmed the demand and imposed equal penalty on the ground that: (i) Credit has not been availed within a reasonable period of time under Rule 4 of Cenvat Credit Rules, 2002/2004. (ii) HR/MS Plates etc. have been used in the manufacturing of immovable structure and therefore they are not used for manufacturing 'goods' and same are not capital goods so as to qualify for credit as inputs. In this regard reliance has been placed on Order No. 58/1/2002-CX dated 15.01.2002 issued by the Board from F. No. 154/26/99-CX4. (iii) That the storage tanks, though not embedded in the earth, are erected at site stage by stage and after completion they cannot be physically moved. On disposal, they have to be necessarily dismantled and sold as metal sheet/scrap. It is not possible to assemble the tank all over again. Such tanks are therefore not moveable and cannot be considered as excisable goods. (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dalmia Cements (Bharat) Ltd. Vs CESTAT, Chennai - 2016 (341) E.L.T. 102 (Mad.) (xxiii) Commr. Of C.Ex., Visakhapatnam-II Vs Sai Sahmita Storages (P) Ltd. 2011 (270) E.L.T. 33 (A.P) (xxiv) SLR Steel Ltd. Vs Commissioner of C.Ex., Banglore-II 2010 (249) E.L.T. 394 (Tri-Bang.) (xxv) Commissioner of Central Excise, Banglore-II Vs SLR Steel Ltd. 2012 (280) E.L.T. 176 (Kar.) (xxvi) HNG Float Glass Ltd. v. CCE, Vadodara 2022 (12) TMI 132 CESTAT Ahmedabad (xxvii) SKF Technologies (1) Pvt. Ltd. v. CCE, Ahmedabad - 2018 (3) TMI 99- CESTAT Ahmedabad (xxviii) Ultratech Cement Ltd Vs CCE - 2023 (8) TMI 184-CESTAT Ahmedabad 4. The Ld. Commissioner in the impugned order observes that the steel plates were used in the fabrication of immovable items which cannot be called "capital goods" and thus the same cannot be treated as "inputs" in terms of Explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2004. The Appellants submit that notwithstanding the aforesaid finding, the steel items under dispute are in any case, eligible for Cenvat credit as "inputs" under sub-clause (1) of Rule 2(k) of the Cenvat Credit Rules, 2004, as the same were used in or in relation to the manufacture of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to the manufacture of final products or for any other purpose, within the factory of production: (ii) all goods except light diesel oil, high speed diesel oil, motor spirit commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1-The light diesel oil, high speed diesel oil, motor spirit commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2 - Input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer:" (Emphasis supplied) Thus, the definition of inputs covers all the goods used in or in relation to the manufacture of the final product, whether directly or indirectly and also includes goods used in the manufacture of capital goods which are fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cannot be called "inputs". The Appellants submit that immovability is not a criteria relevant for determining whether Cenvat credit on goods used for manufacture of such plant and machinery is to be allowed or not. 7.7 We find that there is no restriction in Rule 2(k) of Cenvat Credit Rules, 2004, for the availment of the Cenvat credit of the duty paid on goods used for manufacture of capital goods. All that the said rule requires is whether such capital goods are used for manufacture of excisable goods in the factory. Once this requirement is satisfied, the fact that such capital goods came into existence as an immovable property is irrelevant or immaterial to avail Cenvat Credit. 7.8 We agree with the contention of Ld Counsel that Reliance placed by the Ld. Commissioner on the Board Circular dated 15.01.2022 is misplaced. The said circular merely identifies facets of manufacture of goods and duty liability under central excise act. The purpose of the said circular is only to clarify whether immovable structure is 'goods' for the purpose of levy of excise duty. There is nothing in the circular which even remotely suggest that reasoning therein has to be applied to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified capital goods under sub-clause (ii) of clause (A) of the definition of "capital goods" under Rule 2(a) of the Cenvat Credit Rules, 2004. The Hon'ble Supreme Court in CCE, Jaipur v. Rajasthan Spinning & Weaving Mills Limited-2010 (255) ELT 481 (SC) has examined the issue of eligibility of Cenvat credit availed on MS plates items used in the fabrication of chimneys. The Hon'ble Supreme Court has held that, once it is not under dispute that the impugned items are used in the fabrication of chimneys, Cenvat credit availed on the same cannot be denied. Thus, ground in impugned order is also rejected. 7.11 The Appellants have availed Cenvat credit on HR, MS and SS plates used in the fabrication of pipes. Pipes are specified capital goods under sub-clause (vi) of clause (A) of the definition of "capital goods" under Rule 2(a) of the Cenvat Credit Rules, 2004.Thus, the HR, MS and SS plates items used in the fabrication of specified capital goods, i.e. pipes are eligible for Cenvat credit as inputs in terms of Explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2004, i.e. goods used in the manufacture of capital goods which are further used in the factory of the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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