SAKTHI SUGARS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal filed by the assessee is against denial of CENVAT credit of Rs. 5,29,239/ - in respect of MS plates, MS angles, MS channels, HR non -alloy steel plates and false flooring components for the period June, 2002 to July, 2003. The above items, barring the flooring components, were used in the fabrication of structural support to machinery such as boilers, turbines etc., falling under Chapter 84 of the Schedule to Central Excise Tariff Act. The flooring components were used in the fabrication of false flooring over the network of cables laid on the floor of the factory building. These cables were recognised as capital goods eligible for CENVAT credit. The lower authorities have denied CENVAT credit on the aforesaid items to the assessee on the ground that they were not covered under the definition of "capital goods" given under Clause (b) of Rule 2 of the CENVAT Credit Rules, 2002. This provision reads as under:

(2.) THE appellants claimed under Sub -clause (iii) of Clause (b) of Rule 2. This claim was rejected by the authorities, who held that the supporting structures could not be considered as components, spares and accessories of any capital goods specified under Sub -clause (i). The lower appellate authority relied on a final order of this Bench, wherein CENVAT credit was held to be inadmissible to MS plates falling under Heading 72.08.

(3.) IN the case of Bellary Steel & Alloys Ltd. v. Commissioner of Central Excise, Belgaum cited by learned Counsel, angles, channels, sheets etc., used in the fabrication and erection of technological structure were recognised as inputs. In that case, the above items were used in the fabrication of structural support to machinery. The benefit of capital goods credit under Rule 57Q of the erstwhile Central Excise Rules, 1944 was extended to those items. In the present case, however, the question whether capital goods credit is admissible to similar items which were used for similar purpose will have to be examined with reference to relevant provisions of Rule 2 of the CENVAT Credit Rules. It is not in dispute that the machinery for which structural support was provided was covered under Chapter 84 of the Central Excise Tariff Schedule. In other words, such machinery was covered under Rule 2(b)(i) of the CCR, 2002. Components of such goods were covered under Rule 2(b)(iii). Hence, it appears, CENVAT credit on the said items (channels, angles etc.) is admissible to the appellants in terms of Rule 2(b) of the CCR, 2002. The assessee has been claiming under this provision all throughout.