Rakesh Kumar, J. - (1.)THE appellant are manufacturers of sugar and molasses from sugarcane chargeable to Central Excise duty. During the period from April, 2008 to December, 2008, they availed Cenvat credit of Rs. 332,081/ - in respect of MS Angles, Channels, Plates, Joists, GP Sheets etc. which according to the appellant had been used in fabrication of mill house machinery, such as Trace plate, pressure chute, Tough plate. Tail bar coupling, C.I. coupling, Rack elevator/rack carrier, base frame, gear box; I.D. fan of boiler, centrifugal machine cover, magma body, evaporator, pan and centrifugal machine pipeline, platform of crystallize at boiling house, bagasse carrier, cable trey, 4 MW turbine of power house etc. The department being of the view the appellant are not eligible for above -mentioned Cenvat credit, issued a show cause notice dated 30th March, 2009 for denying the same, its recovery along with interest and imposition of penalty. The show cause notice, however, alleged that all these items are in the nature of consumables used for repair and maintenance of the plant and machinery and, hence, would not be eligible for Cenvat credit. The show cause notice was adjudicated by the Assistant Commissioner vide order -in -original dated 27 -1 -2010 by which he confirmed the above -mentioned Cenvat credit demand along with interest and imposed penalty of equal amount. In this order, the Assistant Commissioner observing that plant and machinery assembled at site cannot be treated as goods, held that steel items, in question, are neither covered by the definition of capital goods nor by the definition of input. On appeal to Commissioner (Appeals), this order of the Assistant Commissioner was upheld except for reducing the penalty to Rs. 70,000/ -. Against this order of the Commissioner (Appeals), this appeal has been filed. Heard both the sides.
(2.)MS . Sukriti Das, Advocate, the learned Counsel for the appellant, pleaded that the appellant stand from the very beginning, as reflected in the reply to the show cause notice, has been that the steel items, in question, have been used for fabrication of various components of the sugar mill machinery, that components of sugar mill machinery are covered by the definition of capital goods and, hence, the steel items, in question, would be eligible for Cenvat credit, that the department has wrongly alleged that the steel items, in question, have been used in erection of supporting structures, while from the details of the use of the items as given in reply to the show cause notice, it is clear that the items, in question, have been used for fabrication of various items of sugar mill machinery and that in view of this, the impugned order uploading the Cenvat credit demand and imposition of penalty is not correct. In this regard, she also relies upon the judgment of the Apex Court in the case of CCE, Jaipur v. Rajasthan Spinning & Weaving Mills Ltd. reported in : 2010 (255) E.L.T. 481 (S.C.), judgment of Hon'ble Chhattisgarh High Court in the case of Union of India v. Associated Cement Company Ltd. reported in : 2011 (267) E.L.T. 55 (Chhattisgarh), judgment of Hon'ble Madras High Court in the case of CCE, Tiruchirapalli v. India Cements Ltd. reported in : 2012 (285) E.L.T. 341 (Mad.) and also the judgment of Hon'ble Karnataka High Court in the case of CCE, Mysore v. ICL Sugars Ltd. reported in, 2011 (271) E.L.T. 360 (Kar.). She also pointed out that in terms of judgment of Hon'ble Madras High Court in the case of CCE, Tiruchirapalli v. India Cements Ltd. (supra) the CTD bars, TOR steel, Rebar coils and cement used for construction of plant comprising of concrete foundations, concrete silos for storing raw material etc. would be eligible for Cenvat credit. She pleaded that ration of the above -mentioned judgment of the Apex Court, High Courts and Tribunals is squarely applicable to the facts of this case. She, therefore, pleaded that the impugned order is not correct.
Shri B.B. Sharma, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) in it and emphasised that the steel items, in question, have been used in fabrication of the capital assessed fixed to the earth and, hence, the Cenvat credit in respect of the same has been correctly denied and, as such, there is no infirmity in the impugned order.

(3.)I have considered the submissions from both the sides and perused the records. On going through the order -in -original passed by the Assistant Commissioner, I find that at page 8 of the order, the Assistant Commissioner has given the following findings:
The impugned goods falling under Chapter 72/73 of the said Tariff Act, were used for fabrication of various mill house machinery such as Trace Plate, Pressure Chute, Tough Plate, Tail Bar coupling, Pinion/Pinion teeth, Hammer, Liner Art, C.I. Coupling, Rack Elevator/Rack Carrier, Base Frame, Gear Box; I.D. Fan of Boiler, fabrication of Centrifugal Machine cover, Magma body, Evaporator, Pan & Centrifugal machine pipe line, Platform of Crystallizer at Boiling House and fabrication of Bagasse Carrier runner, Cable Tray, 4 MW Turbine of Power House, etc. and also for its repair and maintenance. Plant and machinery assembled and erected at site cannot be treated as goods for the purpose of excise duty, if it is not marketable and immovable. The word "goods" applies to those which can be brought to the market for being brought and sold. This view was expressed by Hon'ble Supreme Court in Delhi Cloth Mill reported in : 1977 (1) E.L.T. (J 199) (S.C.) [five members constitutional bench] and has been consistently followed by the Apex Court in subsequent cases and by all the High Courts. It has been held that to become goods the articles must be something which can ordinarily come to the market to be brought and sold.

From the above findings of the Assistant Commissioner, which have been upheld by the Commissioner (Appeals), it is clear that the steel items, in question, have been used for fabrication of various items of sugar mill machinery. There is also no dispute that sugar mill machinery is covered by Chapter 84 and hence its components would also be covered by the definition of capital goods, as given in Rule 2(a) of Cenvat Credit Rules, 2004. It is not the finding of the Commissioner (Appeals) that each and every item of machinery had come into existence as fixed to the earth structure. From the description of various items of component and machinery, as given in the order, it is clear that these items have been fabricated and thereafter the same were installed. I, therefore, do not agree that the various items of the components of sugar mill machinery, fabricated by the appellant were fixed to the earth structures. Just because an item of machinery or its component after being fabricated has been installed in course of which it has become fixed to the earth, the Cenvat credit cannot be denied. For considering the eligibility for Cenvat credit what has to be seen is as to whether an item covered by the definition of capital goods as given in Rule 2(a) of the Cenvat Credit Rules, had been brought to the factory or had been fabricated in the factory and it is not material that after fabrication the same had been installed and became fixed to the earth. By this logic, Cenvat credit cannot be allowed in respect of most of the items of machinery which after being brought in the factory or fabricated in the factory are installed after which the same become fixed/attached to earth. In my view, the Cenvat credit has been wrongly denied. Therefore, the impugned order is not sustainable. The same is set aside. The appeal is allowed.