Hon'ble Judges/Coram:
M.V. Ravindran, Member (J) and V. Padmanabhan

ORDER

M.V. Ravindran, Member (J)

1. This appeal is directed against the order in original No. 38 & 39/Commr/CEX/ADJ/STN/2012 dated 21.09.2012.

2. The relevant facts that arise for consideration are appellant is engaged in the manufacture of cement falling under chapter 25 of the first schedule to the Central Excise Tariff Act 1985. For manufacturing of cement appellant requires electricity which is used at various stages of production for conversion of raw material into final products for which the appellant entered into an agreement with M/s. Madhya Pradesh Poorva Kshetra Vidyut Vitran Company (Vidyut Company) for supply of electricity to appellants manufacturing plant. Appellants also engaged one M/s. Kailash Constructions (Contractor) for undertaking the entire work of erection of dedicated Transmission line from Sitpura Sub-station to appellants manufacturing factory. During the period August 2008, September 2008 and October 2009, the appellant availed Cenvat Credit of main components of transmission line like towers or pylons made up of MS duly galvanized, aluminum conductors, insulators and was other hardware like clamp, vibration dampers, cable connectors, etc. Revenue authorities were of the view that availment of Cenvat Credit of cement, cables, etc used for erection/construction of transmission line is incorrect and coming to such conclusions, issued the show cause notice for the reversal of the said ineligible Cenvat Credit. Appellant contested the show cause notice on merits justifying their claim for availment of Cenvat Credit. The adjudicating authority after following the due process of law rejected the contention of the appellant and confirmed the demand raised with interest and also imposed penalties on the ground that the transmission line which is erected is immovable property and they do not appear to be capital goods or inputs used or in relation to manufacture of the appellant's final product, Vidyut Company is an independent legal entity and on construction of these transmission lines they are property of the said Vidyut Company and the transmission line or parts thereof have no integral relation co-extensive with the process of manufacture of appellants final products.

3. Ld. Counsel submits that Cenvat Credit is admissible as usage of electricity in relation to manufacturing process is not disputed and it is essential for the purpose of which, in order to keep uninterrupted power supply, a dedicated power line was proposed by the appellant to the Vidyut Co. which was accepted and they were permitted to lay dedicated transaction line. It is his submission that the said dedicated transmission line supplies power only to appellant's factory. He would submit that similar issue came up before Tribunal in the case of Birla Corporation Ltd. wherein Tribunal disallowed credit on spares of ropeway used for transporting the crushed limestone from mines on the ground that the same is not material handling equipment within the factory; said decision was upturned by the Hon'ble Apex Court on appeal as reported at MANU/SC/2519/2005 : 2005 (186) ELT 266 (SC). Following the said decision of the Hon'ble Apex Court the Tribunal, in the case of Sanghi Industries Ltd. Vs. CCE Rajkot 2006 (206) ELT 575 (Tri-Del) allowed credit on galvanized structure used as part of transmission line which brings power to the factory from power plant. He would submit ........