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TMI Blog2024 (10) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld in view of the revised definition of input and capital goods of CENVAT Credit Rules, 2004. Denial of credit on Earth Excavation Works - HELD THAT:- As seen from the invoices placed by the assessee, the Commissioner in the impugned order has held that the description of work order in the invoices are shown as Earth Work in soft soil, hard rock and soft work and disposal of the soil from the work area . Thus, the work order being in the nature of civil work and this being excluded from the input service with effect from 01.04.2011, the credit has been rightly denied - As seen from the definition of the input services during the relevant period, it is very clear that the services of laying a foundation or making of structures a construction or execution of works contract are specifically excluded. Therefore, the Commissioner was right in denying the benefit of cenvat credit on all those invoices where it has been categorically mentioned as Earth Excavation Works. Credit on Erection and Commission and Installation services - HELD THAT:- Since there is no dispute that the goods were used in the office within the factory premises, the cenvat credit is allowed. The Commissioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner has clearly established this fact and hence, there are no reason to deny the benefit of cenvat credit as allowed by the Commissioner in the impugned order. Appeal disposed off. - HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) And HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) Mr. M Karthikeyan with Mr. K.S. Ramesh and Ms. Roopa, Advocates for the Assessee Mr. Maneesh Akhoury, Asst. Commissioner (AR) for the Revenue ORDER PER: R. BHAGYA DEVI These two appeals (one filed by the appellant and another filed by the Revenue) are filed against Order-in-Original No. 030/16-17 (CX) dated 03.11.2016 passed by the Commissioner of Central Excise and Customs, Belgaum. 2. The issue is with regard to eligibility of Cenvat Credit on inputs and input services for the period from August 2010 to March 2015. After detailed verification, in the impugned order, out of the total alleged irregular cenvat credit on inputs of Rs.5,26,13,505/-, the Commissioner has allowed an amount of Rs.5,20,00,036/- and denied an amount of Rs.6,13,469/- as ineligible credit. With regard to irregular cenvat credit of Rs.4,11,57,104/- on input services, has allowed Rs.2,91,21,851/- as eligible credit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at since it is used in relation to manufacture of final products, the question of denying the benefit does not arise. With regard to inputs, it is submitted that the goods are used directly or indirectly in relation to manufacture of their final products, hence cenvat credit cannot be denied. Relied on the decision in the case of M/s. Rashtriya Ispat Nigam Ltd. 2016 (44) STR-136 (Tri. Hyd.). 2.4 Further, it is submitted that the appellant has intimated the department before commencement of each project and intimated the details of inputs/input services on which cenvat credits have been availed. In view of the above and considering the decision of the Hon ble Supreme Court in the case of M/s. Maruthi Suzuki Ltd. Vs. Commissioner of Central Excise Delhi-III 2009 (240) ELT 641(SC), the extended period cannot be invoked hence, penalty imposed under Rule 15(2) of the Cenvat Credit Rules 2004 is not sustainable. The learned counsel also submitted that the entire amount of ineligible credit confirmed by the Commissioner has been paid along with interest and 25% penalty as allowed by the Commissioner within 30 days from the date of the issue of the order and the details are placed on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed in Rs. 1. Steel Plates and Structural 4,30,280/- 2. Other inputs 1,83,189/- 3. Civil Works 1,41,875/- 4. Earth Excavation Works 65,84,879/- 5. Fabrication and Erection 40,30,976/- 6. Painting 4,45,123/- 7. Office Furniture 1,78,036/- 8. Road Work 3,90,025/- 4.1 With regard to inputs, the Commissioner has disallowed the same on the ground that the same was used either for laying foundations or making support structures for the capital goods which have been specifically excluded based on the revised definition of inputs and capital goods as per CENVAT Credit Rules, 2004 for the period 01.04.2011 to 30.06.2012 and from 01.07.2012 to 31.03.2015. The only plea taken by the appellant is that the inputs are directly or indirectly used in the manufacture of final products, ignoring the fact that they are specifically excluded from the definition of inputs. In view of the above, we uphold the denial of cenvat credit on the inputs during the relevant period in view of the revised definition of input and capital goods of CENVAT Credit Rules, 2004 as reproduced below: [(k) input means - (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or] As seen from the above definition of the input services during the relevant period, it is very clear that the services of laying a foundation or making of structures a construction or execution of works contract are specifically excluded. Therefore, the Commissioner was right in denying the benefit of cenvat credit on all those invoices where it has been categorically mentioned as Earth Excavation Works. 4.3 Cenvat credit on Erection and Commission and Installation services, the Commissioner has denied cenvat credit only to the extent of Rs.40,30,976/-. This amount is being denied only on the ground that this relates to laying foundation or making of support structure of capital goods which is exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any goods used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed. 4.5 In view of the above clarification issued by the Board, since there is no dispute that the goods were used in the office within the factory premises, the cenvat credit is allowed. The Commissioner has denied the benefit on Road Works on the ground that the road work carried out inside the factory is a civil structure and hence, excluded from the purview of the definition of input services . As discussed above, since these services are also excluded from the definition of the input services , rejection of the cenvat credit by the Commissioner is upheld. The amount of credit of Rs.1,26,48,722/- disallowed by the Commissioner has also been reversed by the appellant partly at the time of the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items falling CETH 72 72 of CETA 1985. Out of the total 20,762 MT of Steel, 16,616 MT has been utilized in production and fabrication of various technological structures, the details of which are exhaustively discussed in Chartered Engineer Certificate dated 10.02.2016 and 15.03.2016. The Commissioner also notes that the assessee had not utilized cenvat credit on substantial quantity of structural steel (4,045 MTs) wherever they found that the items are not eligible for cenvat credit. The above facts have not been disputed by the Revenue. The objections raised by the department in their grounds of appeal is that the Jurisdictional Ranger Officer has categorically mentioned that it is not possible to correlate invoice-wise material details with that of the material used and various statements that confirmed the cenvat credit was irregularly availed was ignored by the Commissioner. However, the observations of the Commissioner in the impugned order which are based on facts and the Chartered Engineer s Certificates cannot be brushed aside. The Range Officers have not disputed the fact that the inputs and input services being used in the factory but only observed that one to one corre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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