2018 (4) TMI 1224 – CESTAT CHENNAI – TMI – CENVAT credit – For import and receipt of ethylene through sea, they have put up a jetty in Karaikal Port along with all connected facilities – denial on the ground that these are located in the unregistered premises and further they have no direct role in the manufacturing process of excisable final products – Held that: – the appellant have put up jetty and connected facilities in the sea near Karaikal Port only to facilitate the receipt and transfer of their essential raw materials ethylene to bring it to the factory for further manufacture. Apparently, such handling and receipt of essential raw materials is to be considered as part of integral manufacturing process.
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Tribunal in Finolex Industries Ltd. Vs. Commissioner of Central Excise, Pune [2003 (5) TMI 102 – CESTAT, MUMBAI] examined a similar dispute and held that the jetty put up by the appellant was part of the premises and the same should be considered as falling within the sc
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ve availed credit on these items as capital goods under CENVAT Credit Rules, 2004. Revenue objected the same on the ground that these are located in the unregistered premises and further they have no direct role in the manufacturing process of excisable final products. Further, it was also alleged that the said arrangements are not exclusively used by the appellant. The proceedings against the appellant concluded in the impugned order. The original authority upheld the view of the Revenue, denied the credit of ₹ 97,42,868/- on such materials and imposed equal amount of penalty under Rule 15(2) of CENVAT Credit Rules, 2004 r/w section 11AC of Central Excise Act, 1944. 3. The ld. counsel contesting the impugned order submitted that the jetty and other arrangements in the port are put up by the appellant for receipt and transfer of one of the essential raw materials for the manufacturing process. They have spent the full money on such establishment and paid excise duty on such goods
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es in the sea near Karaikal Port only to facilitate the receipt and transfer of their essential raw materials ethylene to bring it to the factory for further manufacture. Apparently, such handling and receipt of essential raw materials is to be considered as part of integral manufacturing process. We note that similar dispute came before the Hon ble Bombay High Court in the case of Reliance Industries Ltd. reported in 2017-TIOL-1630-HC-MUM-CX. The Hon ble High Court after extensively analyzing various decided case laws including the decision of the Hon ble Supreme Court in the case of Jawahar Mills Ltd. – 2001 (132) ELT 3 (SC) and Jayaswal Neco Ltd. Vs. Commissioner of Central Excise, Raipur – 2015-TIOL-70-SC-CX held that single point mooring system along with connected equipment like anchor chain, piles on pipes, offshore services etc. are eligible for credit as capital goods, as these are connected to the receipt of raw materials essential for manufacturing process. In the said dispu
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