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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 ..... tal 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 COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS LTD. [ 2010 (7) TMI 12 - SUPREME COURT ] 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. Iron and steel items used in the fabrication of supporting structures for capital goods - HELD THAT:- Cenvat credit has been denied on iron and steel items used in the fabrication of supporting structures for capital goods is eligible. The Appellants have availed Cenvat credit on H.R. M.S. S.S. plates used in the fabrication of supporting structures of capital goods. There are cetena of decision wherein it has been held that the credit of steel used to support capital goods is eligible for credit. Denial of credit on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bonafide belief that the 5003.20 MT of H.R. M.S. and S.S. plates were used in fabrication of capital goods and thus were used in or in relation to the manufacture of finished goods. The Appellants availed Cenvat credit of Basic Excise Duty of Rs.2,63,25,623/- and Education Cess of Rs.1,20,973/- on the 5003.20 MT of H.R. M.S. and S.S. plates purchased during 2003 to 2005 in the month of March 2006 after the completion of the Copper III plant. During the scrutiny of the ER-1 return filed by the Appellants for the month of March 2006 it was observed by the Department that the Appellants have availed a total Cenvat credit of Rs.2,64,46,596/- on H.R. M.S. and S.S. plates in March 2006 whereas the dates of the duty paying documents described in the input credit account were of the period 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) That the Appellants have an integrated complex plant having various facilities. The entire plant erected and commissioned resulted into the construction of an integrated immovable property which cannot be dismantled without substantial damage. (v) That the then adjudicating authority has correctly not relied upon Chartered Engineer's certificate. 3.4 Ld. Counsel states that all the points are covered by various decision of tribunal. The appellant had relied upon the following decisions. It has been consistent view taken by the courts that credit on Iron Steel Items used in manufacturing of plant machineries and accessories thereof cannot be denied: (i) HIL Limited Vs CCE - 2023 (4)TMI 428-CESTAT Ahmedabad (ii) Bharat Petroleum Corporation Ltd V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 the finished products. 5. He further argued that the notice has been issued beyond the normal period of limitation. 6. Ld. AR relies on impugned order. 7. We have considered the rival submissions and deal with it issue wise in following paras. 7.1 Ld. Counsel has argued that despite there being a specific observation by the Tribunal in its order dated 09.09.2014 that the adjudicating authority has failed to consider Chartered Engineers certificate in its true perspective and therefore the same needs reconsideration. The Commissioner in the impugned order erred in defying the direction of this Tribunal without making any independent observations on the certificate. He po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating 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 further used in the factory. 7.4 The term Capital goods have been defined under Rule 2(a) of the Cenvat Credit Rules, 2004 during the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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 decide the eligibility of credit on capital goods which is governed only by the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition 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 manufacturer. The Appellants have used H.R. M.S. S.S. in the fabrication ..... X X X X Extracts X X X X X X X X Extracts X X X X
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