JUDGMENT

Manisha Batra, J.

This is an application for condonation of delay of 4 days in filing the appeal.

For the reasons mentioned in the application, the same is allowed and the delay of 4 days in filing the appeal is condoned.

Main Case

This Tax Appeal filed under section 35G of the CENTRAL EXCISE ACT , 1944 (for short Act, 1944") is directed against order No.60289/2017 dated 20.02.2017 in Appeal No.E/57276/2013-SM(BR) passed by Customs, Excise and Service Tax Appellate Tribunal, Chandigarh-II (hereinafter to be mentioned as "Tribunal").

2. Material facts giving rise to the present appeal, briefly stated are that the appellant Company is engaged in manufacture of cotton yarn and holds the Central Excise Registration. It has been availing cenvat credit on capital goods and input services which are used in or in relation to manufacture of final products, under Cenvat Credit Rules, 2004 (for short "Rules, 2004"). During the period from August 2006 to April 2007 also, it had availed cenvat credit on certain capital goods/services. The auditors of Central Excise, Chandigarh-II conducted an audit of the record of the appellant on 26.08.2009 and observed that in contravention of the Rules, 2004, the appellant had availed certain cenvat credits. A show cause notice dated 03.08.2010 was issued against it. The appellant responded to the same. The adjudicating authority vide order dated 12.12.2011 confirmed demand of a sum of Rs.15,16,552/- against the appellant besides imposing penalty of equivalent amount and claiming interest. The appellant preferred an appeal before the First Appellate Authority. The same was partly allowed vide order dated 04.02.2013 and demand of a sum of Rs.7,67,824/- was disallowed whereas the remaining demands along with order of imposition of interest and penalty were upheld. The appellant still being aggrieved by the same, filed an appeal before the Tribunal wherein, it restricted its prayer to the cenvat credit of a sum of Rs.5,93,453/- taken by it on GP coils, GP sheets, aluminium sections etc. that were used by it in making duct for air humidification machine to carry and extract the air from its factory premises so as to regulate humidity in the production area. The Tribunal dismissed the appeal filed by the appellant by passing order dated 20.02.2017.

3. The instant appeal has been filed by the appellant on the ground that the cenvat credit was taken by it on GP coils, GP sheets, aluminium sections etc. that were used in making air ducts for humidification machinery and the same were covered under the definition of capital goods under Chapter 84 of Central Excise Tariff Act, 1985 (for short "Tariff Act"). Learned counsel for the appellant vehemently argued that the impugned order dated 20.02.2017 was not sustainable in the eyes of law as the Tribunal had wrongly held that the cenvat credit claimed by it on GP sheets etc. was not qua capital goods. The Tribunal had confused the term "plant" with the term "machinery" and had failed to apply the user test. It had committed an error in holding that the GP sheets etc. could not be treated as capital goods or part of capital goods. He argued that the GP sheets, GP coils etc. which were used in making ducts for air humidifier certainly fell within the ambit and scope of Rule 2 (a) (A) (iii) read with Rule 2 (a) (A) (i) of the Rules, 2004 and were to be treated as accessories of the capital goods i.e. air humidifier referred to in Rule 2 (a) (A) (i) of Rules, 2004. He further argued that even otherwise the GP sheets and GP coils which were used as ducts in the air humidifier, were inputs falling within the definitio