India Cements Ltd. vs. CEST & Customs – [2015] 56 taxmann.com 25 (Madras)

Facts:
The Appellant, manufacturer of cement availed CENVAT credit in respect on MS Rod, Sheet, MS Channel, MS Plate, Flat etc. on the ground that, they are components, parts and accessories of the machineries and equipments. The Department denied the credit alleging that these are not capital goods, as they did not fall under any of the chapters or headings of the tariff mentioned in the definition of capital goods in Rule 2(a)(A) of the CENVAT Credit Rules, 2004. It was also contended that the goods were used for construction of plant and the term “plant” is not defined as capital goods in the Cenvat Credit Rules, 2004. Tribunal dismissed the appeal filed by the appellant relying upon decision of Larger Bench in the case of Vandana Global.

Held:
The High Court observed that it is not in dispute that the impugned goods were used for fabrication of structurals to support various machines like crusher, kiln, hoopers etc. and that without these structurals, the machinery could not be erected and would not function. It also observed that the decision of Apex Court in the case of Rajasthan Spg. And Wvg. Mills Ltd. would be squarely applicable to present case. The High court noted that decision of Saraswati Sugar Mills relied by the department has been distinguished by Madras High Court in assessee’s own case [The Commissioner of Central Excise vs. India Cements Ltd. – [C.M.A.No.1265 of 2014, dated 10-7- 2014]. In the absence of any change in the circumstances and issue remaining the same following the principles laid down in the decision Rajasthan Spg. & Wvg. Mills Ltd. (supra) and the earlier decisions of the Court in C.M.A. No.3101 of 2005, dated 13.12.2012 and India Cements Ltd. (supra), assessee’s appeal was allowed.