Full Judgment
3. The appellants are engaged in the manufacture of Cane Sugar, Molasses and DEA falling under Tariff Heading 17.01, 17.03 and 2204.10 respectively of Central Excise Tariff Act, 1985.
4. The issue involved in the instant appeal is whether Cenvat credit is admissible on HREC Sheet, G.P. Sheet and Plates (all items of Chapter 72) as "capital goods" under Rule 2(b) of Cenvat Credit Rules, 2002.
The case relates to the period Dec'03 to Jan'04. The functional uses of the above referred items, as detailed in reply to the SCN by the appellants, are as under: i) H.R.E.C. Sheet (S. No. 1 & 3 of Annexure - A of the SCN) This has been used in Sugar Hoppers trough for conveying/carrying sugar to sugar graders from Centrifugal machines.
ii) G.P. Sheet (S. No. 2 & 4 of Annexure-A of the SCN) Has been used for making juice trough through which juice of individual mill is received for further process.
iii) Plates (S. No. 5 & 7 of Annexure-A of the SCN) These have been used for making columns for new crystalizers, Sulphur burner, 9 MV turbine and new mill.
Have been used for making columns of new Oliver, Semikestner, 100 Ton Pan, Juice heater, 9MW turbine & C/F machines.
5. The functional use of the impugned goods would indicate that these are used as components, spares or accessories for repair and maintenance or for manufacture and fabrication of the machineries (falling under chapter heading No. 84.38), which in turn are used for the manufacture of sugar and molasses. Therefore, the impugned goods are eligible to the Cenvat credit in terms of Rule 2(b)(iii) of the Cenvat Credit Rules, 2002. I find that the similar items like Plain Plates, Steel Flats, Alloy Steel Bars, Joists and Aluminum Sheets etc.
were held to be eligible capital goods for the purpose of availment of Cenvat credit in appellant's own case by the Tribunal by its Final Order No. 1561-62/06-SM dt.26.10.06. Further, In the case of M/s.
Shakumbari Sugar and Allied Inds. Ltd. v. CCE, Meerut-I, the Tribunal, vide its Final Order No. 1005/07-SM dt. 1.6.07, has held that the M.S.Plates, H.R. Sheets and Angles are eligible to the Cenvat credit.
Similarly in the case of M/s. Triveni Engg. Inds. Ltd. v. CCE, Meerut-I, the Tribunal, vide its Final Order No. 1599/06-SM dt.26.10.06 has held that Plain Plates, Steel Flats, Aluminium Sheets etc. are eligible to the Cenvat credit.
6. I further find that the Hon'ble Rajasthan High Court in the case of UOI v. Hindustan Zinc Ltd. reported in 2007 (214) ELT 510 (Raj.) has held that the items MS/SS plates are essential supplement to the plant and machinery for use in manufacturing goods, for its greater efficiency and better results and thus, it is an integral part of process with which the primary machines are engaged. Therefore, there is no impediment for the goods in question qualifying as capital goods eligible for Modvat credit. Appeal filed by the Revenue against this decision of the Hon'ble Rajasthan High Court has been dismissed by the Hon'ble Supreme Court as reported in 2007 (214) ELT A115.Kisan Co-operative Sugar Factory Ltd. v. CCE, Meerut-I reported in 2007 (79) RLT. 810 (CESTAT-Del.) for disallowing the Cenvat credit on the impugned goods does not seem to be correct because in that case it was held that in the absence of the specific use of the Plain Plates, H.R. Sheets and Angles, such general items cannot be considered as component, spare or accessory of the capital goods. This is not the case here. The appellants have given the details as noted above about the specific uses of the impugned goods, which show that these items are used as component, spare or accessory of the machinery and hence are eligible to the Cenvat credit in terms of Rule 2(b)(iii) of Cenvat Credit Rules, 2002.
8. In the light of the above discussions and following the ratio of the case laws cited by the appellants, I hold that the Cenvat credit of Rs. 1,39,113/- is admissible to the appellants. I order accordingly. The appeal filed by the appellants is allowed.