Custom, Excise & Service Tax Tribunal
C.C.E., Bhopal vs Hindustan Copper Ltd on 29 August, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing:19.8.2016 Date of pronouncement : 29.08. 2016 Central Excise Appeal No.1138 of 2008 with Cross-Objection No.E/268 of 2008 Arising out of the order-in-original No.02-03/COMMR/CEX/2008 dated 20.2.2008 passed by the Commissioner , Customs & Central Excise, Bhopal. C.C.E., Bhopal Appellant Vs. Hindustan Copper Ltd. .. Respondent
Appearance:
Present Ms. Neha Garg, A.R. for the appellant/Revenue None for the respondent Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Technical Member Final Order No.53238/2016 Per B. Ravichandran:
The appeal by Revenue is against the order dated 20.2.2008 of Commissioner of Central Excise, Bhopal.
2. The respondents are engaged in the manufacture of copper concentrate liable to central excise duty. They have availed cenvat credit on tyres and dumpers. Proceedings were initiated against them to recover such credit on the ground that these goods do not fall under the category of capital goods in terms of Rule 2(a) of Cenvat Credit Rules, 2004. The original authority after due process dropped the demand issued to the respondent. Revenue is aggrieved and is in appeal.
3. We have heard the ld. A.R. for Revenue. None appeared on behalf of the respondent. We have perused the appeal records. The original authority allowed the credit on tyres and dumpers. The Department is contesting the finding on the ground that these items are not covered by the definition of capital goods. The dumpers are essentially material handling equipments and the tyres used for such dumpers also are not eligible for cenvat credit. It is Revenues contention that the dumpers classifiable under Chapter 87 of Central Excise Tariff Act, 1985 and the tyres classifiable under Chapter 40 are not eligible for cenvat credit. It was submitted that when the product in question is not at all covered by the definition of capital goods the question of allowing credit does not arise. It was further contended that decision of the Tribunal in India Cement 2005 (182) ELT 398 relying on Honble Supreme Courts decision in Rajasthan State Chemical Works 1991 (55) ELT 444 (SC) is not applicable to the present case as the said decision did not examine the meaning of capital goods in terms of Cenvat Credit Rules, 2004.
4. We find that the eligibility of credit for dumpers and tyres have been examined in details by the original authority. The Honble Supreme Court in Vikram Cements 2006 (197) ELT 195 (SC) and in Madras Cements Ltd. 2010 (257) ELT 321 (SC) held that capital goods used in captive mines are eligible for Cenvat Credit. The original authority applied the said ratio as the respondent manufacturer is having their own captive mine which constitute one integrated unit. We note that the ratios of the cited decisions are to the effect that the capital goods used in the factory of manufacturers of the final product are eligible for credit. The factory of manufacturer should, by extension, mean the captive mine of the manufacturer from where the ores are sourced. The material handing equipments are for moving the raw material which are integrally connected with the manufacture of the final product. We also note that the application of scope of capital goods are not different from the erstwhile Modvat Rules in the present Cenvat Credit Rules, 2004. The Board vide Circular dated 2.12.1996 clarified that all parts, components, accessories which are to be used with capital goods and classifiable under any Chapter heading are eligible for Modvat Credit. The Tribunal in a recent decision in MSP steel and Power Ltd. 2016 TIOL 2054 CESTAT DEL) held that the use of dumper is as capital goods and is an essential and integrated process required in the in the manufacture of final products. It has been noted that in Malabar Cements Ltd. 2002 (149) ELT 751 (Tri-Bang.), the Tribunal allowed the cenvat credit on dumpers as capital goods under erstwhile. Rule 57Q [similar to Rule 2(a) of Cenvat Credit Rules, 2004]. In Tata Steels Ltd. 2012 (282) ELT 469 (Tri-Kolkata), the Tribunal allowed credit on coke transfer cars used within the factory for movement of goods. The decision of Tribunal in Malabar Cements Ltd. (supra) has been upheld by Honble Supreme Court reported in 2003 (153) ELT A 94 (SC)
5. Considering the above analysis and discussion and following the ratio of Honble Supreme Court (supra), we find no merits in the present appeal filed by Revenue. Accordingly, the same is dismissed. Cross-Objection filed by the respondents also stands disposed of.
(Pronounced in Court on 29.08.2016) (Justice Dr. Satish Chandra) President (B. Ravichandran) Technical Member scd/ 3