1. The appellant is engaged in the manufacture of HR coils, sheets falling under Chapter 72 of the Central Excise Tariff Act. The assessee is availing the benefit of CENVAT credit on inputs as well as capital goods in terms of CENVAT Credit Rules (CCR), 2004. The dispute pertains to availment of CENVAT credit of the duty paid on HR plates and sheets manufactured and cleared by the appellant themselves. CENVAT credit was also availed on certain items such as MS beams, channels, joists manufactured and supplied by other vendors. These goods were used within the factory of the appellant for constructing a blast furnace and coke oven plant for use in the factory for manufacture of final products. After the due process of law, the adjudicating authority disallowed CENVAT credit amounting to Rs. 3,03,61,027/- and ordered for its recovery along with interest. A penalty of Rs. 50/- lakhs was also imposed on the appellant under Rule 15 of the CENVAT Credit Rules, 2004. The impugned order dated 10.7.2007 is under challenge before the Tribunal.

2. With the above background, heard Shri M.S. Nagaraja, learned advocate for the appellant as well as Shri Mohammad Yousuf, learned AR for the Revenue.

3. For the construction and erection of the blast furnace and coke over plants, the appellant had entered into agreements with (i) M/s. Euro Ikon Iron and Steel (P) Ltd. (EIISPL) for blast furnace; and (ii) M/s. Euro Coke and Energy (P) Ltd. (ECEPL) for coke oven plant. Both the companies were incorporated as Special Purpose Vehicles (SPVs) for setting up the capital goods as above and were subsequently merged with the appellant. HR plates and sheets, etc., manufactured by the appellant and used for setting up of blast furnace and coke over plants were cleared on payment of duty in favour of EIISPL as well as ECEPL, respectively. The CENVAT credit as capital goods was availed by the appellant only after the merger of the two SPVs with the appellant.

3.1 The Department sought to disallow the CENVAT credit mainly on the following grounds.

"i. The goods which are in the nature of structural steel items (manufactured by the appellant and also procured from outside) were cleared with documents in favour of the SPVs. With the help of such documents, the credit was availed after a delay of more than one and half years and after the merger of two SPVs with the appellant. The CENVAT credit has been disallowed because the input invoices are not in the name of the appellant and further because the credits have not been availed immediately after the receipt of the goods.

ii. The structural steel items were used for fabrication, erection, installation and commissioning of blast furnace and coke oven batteries at site.

iii. Both blast furnace as well as coke oven batteries are huge structures which are constructed stage-by-stage at site. Because of substantial civil work involved in construction and erection of these facilities, the resultant structures are in the nature of immovable property and are not capable of being bought and sold in the ordinary course of sale as goods. Hence, credit of duty as capital goods has been denied."

4. The main grounds of appeal advanced by the appellant are summarised below:

"i. The Appellants had submitted that the Blast Furnace fabricated and erected in the factory was classifiable under CHH 8417 and Coke Oven Plants under CHH 8479 and hence they were covered by the definition of "capital goods". Therefore, the inputs used for fabrication or manufacture of capital goods which are further used in the factory are eligible for CENVAT credit in terms of Explanation 2 to Rule 2 (k) of the CCR, 2004.

CHH 8417 10 00 of the CETA, 1985 covers - "Furnaces and ovens for the roasting, melting or other heat treatment of ores, pyrites or of metals". The Blast Furnace admittedly used for melting iron ores to produce hot metal is thus covered under CHH 8417 and hence capital goods.

CHH 8479 8960 covers - "Coke Oven Plants". Para 3 of the SCN confirms that the Coke Oven' Batteries are used to produce Metallurgical Coke which is used in the Blast Furnace to produce Hot Metal. The fact of functions of the Coke Oven Batteries having been admitted in the SCN and not disputed is not required to be proved by the assessee. It is settled law that admitted facts are not required to be proved.

ii. The contention in the impugned order that the Blast Furnace and Coke Oven Batteries manufactured by using the impugned goods seem to have attained immovability and hence not capital goods is not germane to the eligibility of the steel structurals as inputs used for manufacture of capital goods. The excisability of the resultant Capital Goods is not prescribed as a criterion in the CCR, 2004 for eligibility of the inputs used for manufacture of the capital goods. The only requirement for the goods to be considered as "capital goods" is that the resultant goods must be specified under Chapter 82, 84, 85, 90, etc., of the CETA, 1985 as specified in Rule 2(a)(A) of the CCR, 2004. In the instant case, CHH 8417 10 00 of the CETA, 1985 covers Blast Furnace and CHH 8479 8960 covers Coke Oven Plants and hence they are covered by the definition of "capital goods".

iii. The Commissioner has erred in holding that the capital goods fixed to earth are immovable property. The Blast Furnace and Coke Oven Batteries have their own separate identity before they were fixed to earth. They could be dismantled to their constituent components or parts, transported, erected and commissioned at another site. The mere embedding the goods to earth for their functional requirements do not render such goods to be immovable property. The capital goods embedded in earth for stability, safety and as per the engineering design specifications for their beneficial use is not immovable property. These plant and machinery are specifically included as "excisable goods" falling under CHH 8417 1000 and 8479 8960 in the Central Excise Tariff Act, 1985. There is no legal basis to hold that the embedding of the capital goods, as defined in the CCR, 2004, in earth for their functional requirements exclude them from the definition of "capital goods". The findings in this regard are clearly contrary to law.

iv. Since the Blast Furnace and Coke Oven Plants are classified under CH 84 they are covered by the definition of "capital goods". It is settled legal position that the steel structural items used in the manufacture of capital goods falling under CH 84 which are further used in the factory are eligible for CENVAT credit in terms of Explanation 2 to Rule 2 (k) of the CCR, 2004 even if the capital goods are fixed/embedded to earth.

v. It is settled law that there was no time limit under the CCR, 2004 for taking credit. The credit cannot be denied on the ground that the credit was taken after one and a half years from the date of invoices.

vi. It is undisputed that the assessee had entered in to agreement dated 4.5.2004 with M/s. Euro Ikon Iron &, Steel (P) Ltd. (EIISPL) for construction and erection of Blast Furnace within the factory and agreement dated 12.8.2004 with M/s. Euro Coke Energy (P) Ltd. (ECEPL) for setting up of Coke Oven Plant within the factory. The Blast Furnace and Coke Oven Plant fabricated and erected within the factory are used within the factory for manufacture of dutiable HR &, CR Steel as final products. The fact that Special Purpose Vehicles were only for the purpose of setting up of Blast Furnace and Coke Oven Plant within the factory of the manufacturer and that soon thereafter they merged with JSW Steel Ltd. on 14.12.2005 would show that the assessee was the sole user or beneficiary of the inputs and the resultant capital goods. The ownership of the goods is not a criterion for taking credit.

vii. The advocate reiterated the above grounds and also cited the following case laws in his favour.

i. Sirpur Paper Mills Ltd. v. CCE, Hyderabad : 1998 (97) ELT 3(SC)

ii. CCE v. SLR Steels Ltd : 2012 (280) ELT 176 (Kar.)

iii. CCE, Raigad v. JSW Ispat Steel Ltd.: 2015 (327) ELT 549 (Tri.-Mum.)

iv. KCP Ltd. v. CCE, Guntur: 2009 (237) ELT 500 (Tri.-Bang.)

v. Balkrishna Industries Ltd. v. CCE, Jaipur : 2016 (335) ELT 559 (Tri.-Del.)

vi. JSW Steel Ltd. v. CCE, Salem : 2014 (307) ELT 929 (Tri.-Del.)"

5. Learned DR supported the impugned order. He submitted that the blast furnace as well as coke oven plant cannot be considered as capital goods. Both these are in the nature of very huge structures and are constructed stage-by-stage at site. Because of the substantial civil work involved in the construction, they have attained immovability and cannot be dismantled without completely destroying them. Consequently, they cannot be considered as capital goods within the definition of CCR, 2004. Further, he submitted that the structural steel items used for the construction of the above cannot be considered as inputs also. Since these cannot be allowed under the category of inputs or capital goods, he submitted that the impugned order may be upheld and CENVAT credit ordered for recovery.

6. The appellant availed CENVAT credit on various structural items such as HR plates, sheets, MS beams, channels, etc., partially manufactured in their own factory and partially procured from outside. The duty paid on such items were availed as CENVAT credit in the category of capital goods. These structural steel items have been used for fabrication, erection, installation and commissioning of blast furnace as well as coke oven batteries at the site within the factory premises. There is no dispute that both blast furnace as well as coke oven batteries are meant to be used in the manufacture of goods within the factory. Because of the sheer size of these structures, these were fabricated and erected stage-by-stage at site. These involved construction of foundation involving civil work and further erection of the structures on top of it. The CENVAT credit has been disallowed in the impugned order on the ground that these manufacturing facilities have attained the status of immovable property because of the substantial civil work involved in the construction and erection of these. It has also been considered that the resultant structures are not capable of being bought and sold in the ordinary course of sale and hence cannot be considered as goods. Since the CENVAT credit is allowable only for capital goods and the inputs used in the manufacture thereof, the credit has been denied.

7. The claim of the appellant is that both blast furnace as well as coke oven batteries are covered within the Central Excise Tariff Act and classifiable under CETH 8417 which covers Furnaces and ovens for the roasting, melting or other heat treatment of ores, pyrites or of metals.

7.1 It has been submitted that blast furnace is used for melting iron ore to produce hot metal and hence, covered within CETH 8417 and hence capital goods.

"CETH 8417 8960 covers coke oven plants. Since the coke oven batteries are used to produce metallurgic coke for use in the blast furnace, these are covered within the description of the above subheading.

Accordingly, the appellant has claimed that blast furnace as well as coke oven batteries should be considered as capital goods. Since the structural steel items have been used for fabrication of such goods, the CENVAT credit will be allowable in terms of Rule 2(k)(Explanation 2 to CCR, 2004)."

8. To decide the issue whether these manufacturing facilities are to be considered as immovable property or as capital goods, it is useful to refer to the clarification issued by CBEC vide order No. 53/2/98-CX dated 2.4.1998 in which the excisability of plant and machinery assembled at site has been clarified. The Board has referred to the decision of the Hon'ble Supreme Court in the case of Sirpur Paper Mills Ltd. [1998 (97) ELT 3 (SC)] and has prescribed the following broad criteria to be satisfied for considering the plant and machinery assembled and erected at site as excisable.

"i. The final product is distinct and apart from the components that have gone into its production.

ii. It is specified in the Central Excise Tariff as excisable goods.

iii. It is goods and to merit to be called goods, it must be movable and saleable.

Whatever is embedded in earth, unless it is like a building or tree or similar things, must not be necessarily treated as immovable property, if the whole purpose behind attaching to a concrete base is to secure maximum operational efficiency and safety.

iv. It can be sold in the market. It would be treated as marketable even though it may have to be removed from its base and dismantled, before being sold."

9. The claim of the appellant which has been explained in the above paragraph is that these manufacturing facilities find place specifically in the Central Excise Tariff. Both blast furnace and coke oven batteries are, without doubt, huge structures whose size is required to cater to the size of operation in a steel plant. The sheer size also indicates that these manufacturing facilities cannot be suspended in mid-air and will need to be adequately supported by means of civil foundation and other civil structures. Consequently, we have to conclude that both these facilities get supported and embedded to the ground for the purposes of safety and smooth operational efficiency. When, we refer to the decision of the Hon'ble Supreme Court cited supra, we find that the apex court has excluded only things of the type such as building or tree which get fixed to the earth. We find that both blast furnace and coke oven batteries cannot be considered to be in the same category as building or tree. In view of the above discussions, it emerges that both manufacturing facilities are to be considered as capital goods.

10. We may look at the situation from another perspective. We are not deciding the excisability and chargeability to excise duty of blast furnace and coke oven batteries. There is no doubt that the structural steel items, which are duty paid, have been used in the fabrication of these two structures. Rule 2(a) of CCR, 2004 defines capital goods. It includes all goods falling under Chapter 82, 84, 85, 90, etc. The definition of capital goods also includes components, spares and accessories of goods above. There is no dispute that the structural steel items are components and have been used in the fabrication and assembly at site of the manufacturing facilities. Consequently, we take the view that even if the blast furnace as well as coke oven batteries are made immovable by attaching them to the foundation for trouble free function, the eligibility for availment of CENVAT credit cannot be denied.

There is one more ground advanced by the Revenue to deny the CENVAT credit. The credit has been taken belatedly i.e., after a period of one and half years after duty has been paid on the structural steel items. Further it has been contended by the Revenue that the appellant manufactured HR sheets and plates and delivered them on payment of duty to ECEPL and EIISPL, which were set up for purposes of erecting and setting up two structures. It is on record that both the SPVs have been merged with the appellant's company. 11. It is a settled law that credit cannot be denied on the ground that duty paid documents are more than a year old. Since there is no time limit provided for taking CENVAT credit under CCR, the same cannot be denied on the ground of delay. In any case because of delay in taking of credit, substantial credit in the form of CENVAT credit cannot be denied. Such a view finds support in the Tribunal decision in the case of Balakrishna Industries (supra). It is also fairly well settled that the principal manufacturer for whom the capital goods have been erected, are eligible to take CENVAT credit on inputs or capital goods used within the factory. Such a view finds supports from the Three-Member decision of the Tribunal's decision in respect of another unit of appellant's company (cited supra). 12. In view of the above, we are of the considered view that appellants are rightly entitled for capital goods credit on various structural steel items used for setting up the blast furnace as well as coke oven batteries. The impugned order denying such credit is unsustainable and is set aside and the appeal is allowed.