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TMI Blog2024 (4) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... eging that the assessee is not eligible to avail credit on capital goods in respect of various items of machinery and equipments, instruments falling under Chapter 84, 89 and 90 CETA, 1985 since after fixing of these capital items to the plants fixed become immovable and accordingly non-excisable. The Tribunal had observed that For capital goods Cenvat credit, the items must be among those mentioned in this Rule and should have been used in the factory of the manufacturer and how the items are not used relevant. The words used in Rule 2(a) are used in the factory of manufacturer of the final product not used in the manufacture of final product . Therefore, once any item received in the factory is capital goods in terms of Rule 2(a) of the Cenvat Credit Rules, and is used in the factory, the manufacturer would be entitled to Cenvat credit of excise duty paid in respect of the same. In the appellant s own case MANGALORE REFINERY AND PETROCHEMICALS LIMITED VERSUS C.C.E. S.T., MANGALORE [ 2023 (8) TMI 696 - CESTAT BANGALORE] , this Tribunal has already taken a view that merely because the items are used for fabrication in the erection of storage tank which affixed to earth and become i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalty. On adjudication, the demand was reduced by Rs.2,92,23,646/- being part of the earlier order dt. 03/02/2014 and Rs.173,76,67,082/- confirmed with interest and penalty. Hence, the present appeal. 3.1. At the outset, learned Senior Advocate for the appellant has submitted that the cenvat credit availed on various capital goods on its receipt into the factory were in manufactured condition and on the respective Central Excise invoices, the declared excise tariff heading mentioned are under Chapter 84, 85, 90 and 73 pipes and pipe fittings, as applicable. These goods were then incorporated by attaching / assembling with pipes and pipe fittings to partake processing of refining of the crude petroleum in their factory premises. He has submitted that the list of 1373 invoices with the aforesaid tariff heading had been submitted before the authorities for scrutiny and verification. It is his submission that there is no denial on the classification of the items declared on the invoices nor its receipt in the factory, which were used in the factory and constitute part and parcel of the plant used for refining petroleum. It is his submission that the received goods satisfy the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty; hence credit on the goods consumed in the fabrication of storage tank is inadmissible. Even though the present show-cause notice included the said demand, however, the impugned order reduced the demand on the ground that separate order has been passed in this regard which now stands decided in their favour by the Tribunal. Further they have submitted that the credit has been rightly availed on various items as it is settled law that the scope of entry components, spares and accessories in the definition of capital goods is not restricted to the components, spares and accessories falling under Chapter 82, 84, 85 or 90 of CETA, 1985 but covers all spares, components and accessories of specified goods irrespective of their classification. In support, they have referred to the Board s Circular No.276/110/96-TRU dt. 02/12/1996. 3.4. The learned Senior Advocate has further submitted that the demand is barred by limitation for the period from April 2010 to March 2014. It is their contention that mere finding recorded is that in the era of self-assessment, the availment of ineligible credit is sufficient to hold that there was suppression and intent to evade payment of duty, is wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Vandana Global Ltd. (supra). 8. We find that the ratio of the Larger Bench of this Tribunal in Vandana Global Ltd. case has been set aside by the Hon ble Chhattisgarh High Court following the judgments of Hon ble Gujarat High Court in the case of Mundra Ports Special Economic Zone Ltd. (supra) and Hon ble Madras High Court in the case of Thiru Arooran Sugars (supra). 9. Rule 2(a) of Cenvat Credit Rules, 2004, as was in force, during the relevant period, reads as below:- RULE 2(a) ―capital goods means :- (A) the following goods, namely :- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, [heading 6805, grinding wheels and the like, and parts thereof falling under [heading 6804 and wagons of sub-heading 860692]] of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank, used (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which (except for office equipment or appliance) are used in the factory of the manufacture of the final products or for providing of output service. Thus any items which is covered by the list of the items mentioned in Rule 2(a) of the Cenvat Credit Rules, except for office equipment or office appliances, and is used in any manner in the factory of the manufacturer of the final products, would be covered by the definition of the capital goods and accordingly would be eligible for Cenvat credit. There is absolutely no requirement that the capital goods at the time of receipt must be owned by manufacturer or that the same would cease to be capital goods, if they are installed in the factory and become fixed to earth. In fact, most of the capital goods the machinery, equipment or instruments covered by Chapters 84, 85 90, pipes and tubes, pollution control equipment refractories, and storage tanks are required to be installed and after installation, the same put together constitute a manufacturing plant, which is a fixed to earth structure. Just because after being installed in the factory, the capital goods put together become a plant which is a fixed to earth structure, the Cenva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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