Union of India (UOI) vs Associated Cement Company Ltd.

Dhirendra Mishra, J.—Revenue''s appeal u/s 35G of the Central Excise Act, 1944 against the impugned order of Customs Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi (in short "the Tribunal") has been admitted for hearing on the following substantial questions of law:

Whether the learned Appellate Tribunal has erred in allowing the appeal to the Respondent and allowing them credit on the impugned items?

Whether the items, as specified in the memo of the appeal, were defined as "Capital Goods" in terms of Rule 2(b) of the CENVAT Credit Rules, 2002 during the period from December, 2003 to March, 2004? And if not, then is it correct that the same were not entitled to Mod-vat credit as not being "Capital Goods

CENVAT credit was disallowed to the Respondent/Assessee on the capital goods namely, Wear Plate, HRSS Plate, MS Plate, Angles, Channels etc. The appeal preferred by the Assessee has been further dismissed by the Commissioner (Appeals) vide Annexure A/4. However, the Tribunal allowed the appeal of the Assessee by relying upon the decision of the Mumbai Tribunal in the case of Ispat Industries Ltd. v. CCE, Mumbai reported in 2006 (195) E.L.T. 164, wherein it has been held that structural items such as angles and channels, plates, rods etc. required to make machines function without any vibration or movement, cannot be said to be used in construction of buildings but linked with machinery used in production of final products, and, therefore, the CENVAT credit is admissible.

Mr. Shashank Dubey, learned Sr. Advocate with Mrs. Smiti Sharma, Advocate, appearing for the Respondent/Assessee, relying upon the latest decision of the Hon''ble Supreme Court dated 9th July, 2010 passed in Civil Appeal No. 3760/03 in the matter of Commissioner of Central Excise, Jaipur v. Rajasthan Spinning and Weaving Mills Ltd. 2010 (255) E.L.T. 481 (S.C.) argued that the issue sought to be raised by the revenue in this appeal stands concluded in favour of the Assessee.

Reliance is also placed on the decision of the Supreme Court in the matter of Commissioner of Central Excise Coimbatore and Others Vs. Jawahar Mills Ltd. and Others, .

Mr. Bhishma Kinger, learned Counsel for the Appellant/revenue fairly agrees that the issue involved in this appeal has been finally decided by the Hon''ble Supreme Court in the above judgments in favour of the Assessee.

In the matter of Rajasthan Spinning and Weaving Mills Ltd. (supra), the Hon''ble Supreme Court relying upon its earlier judgment in Jawahar Mills Ltd. (supra) held in para 14 of the judgment that the Assessee was entitled to avail of MODVAT credit in respect of the subject items viz. steel plates and M.S. channels used in the fabrication of chimney for the diesel generating set, by treating these items as capital goods in terms of Rule 57Q of the Rules.

In the instant case also, the Tribunal has held that the Assessee was entitled for MODVAT credit on capital goods namely, Wear Plate, HRSS Plate, MS Plate, Angles, Channels etc. used for connecting/fitting fans, casing, ducting in kilns for the manufacture of intermediate product ''clinker''.

We are, therefore, of the considered opinion that the Tribunal was correct in law in holding that the Assessee was entitled to avail of CENVAT credit in respect of the above subject items.

For the aforesaid reasons, we find no substance in this appeal, the same deserves to be and is, accordingly, dismissed.