Custom, Excise & Service Tax Tribunal
M/S. Vandana Global Ltd vs C.C.E., Raipur on 27 July, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Excise Appeal No.E/1036/2008-EX [DB]
[Arising out of Order-in-Original No. Commissioenr/RPR/12-14/2008 dated 14.02.2008 passed by the Commissioner (Appeals), Customs, Central Excise, Raipur]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, MEMBER (TECHNICAL)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Vandana Global ltd. Appellant
Vs.
C.C.E., Raipur Respondent
Present for the Appellant : Shri.B.L. Narasimhan, Advocate
Present for the Respondent: Shri.R.K.Mishra, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, MEMBER (TECHNICAL)
Date of Hearing : 04.07.2016
Date of Pronouncement:27.07.2016
FINAL ORDER NO. 52637/2016
PER: R.K. SINGH
The appeal is filed against Order-in-Original No. Commissioner/RPR/12-14/2008 dated 14.02.2008 in terms of which cenvat credit amounting to Rs.2,39,65,676/- was disallowed and ordered to be recovered along with interest and equal amount of penalty was imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 15 of the Cenvat Credit Rules, 2004.
2. The ld. Counsel for the appellant submitted/ pleaded/contented as under:-
(i) out of the aforesaid amount, an amount of Rs.2,33,58,461/- pertains to the credit on iron and steel items. Such credit has been disallowed by judgment of the CESTAT Larger Bench in the case of Vandana Global Ltd. vs. Commissioner of Central Excise, Raipur -2010 (253) E.L.T. 440 (Tri.- LB).
2. An amount of Rs.6,07,215/- pertains to denial of credit on Oxygen Gas, Thermal Insulation and welding electrodes and that credit on welding electrodes and oxygen gas used in fabrication and maintenance work is required to be allowed in the light of the following decisions:-
1. Ramala Sahkari Chini Mills Ltd. v. CCE, 2010 (260) E.L.T. 321 (SC) (Referral Order) with Ramala Sahkari Chini Mills Ltd. vs. CCE 2016 (334) ELT 3 (SC) (Larger Bench)
2. Ambuja Cement Eastern Ltd. v. CCE 2010 (256) ELT ;690 (Chattisgarh)
3. CCE v. Century Cements 2013 (290) ELT 348 (Chattisgarh)
4. Hindustan Zinc v. Union of India 2008 (228) ELT 517 (Raj.)
3. As the issue of inadmissibility of the impugned credit on iron and steel items involved in this case was finally resolved by the Larger Bench in the case of Vandana Global (Supra), the extended period in these circumstances is not invokable in the light of the following decisions:-
1. Ultratech Cement Ltd.v. CCE 2016 (332) ELT 356 (Tri.- Del.)
2. Ultratech Cement Ltd. vs. CCE, Final Order No.FO/54652/ 2014 Ex [BR] dated 01.12.2014, Appeal No. E/53915/2014.
3. KM Sugar Mills Ltd. V. CCE, Final Order No.FO/54636/2014-Ex.[BR] dated 21.11.2014, Appeal No.E/52101/2014.
4. Grasim Industries Ltd. v. CCE, Final order No.A/53106/2014-Ex [DB] dated 17.07.2014, Appeal No.E/58904/2014
5. Umax Packaging Ltd. v. CCE 2016 (2) TMI 585 CESTAT New Delhi
6. Bhoramdeo Sahakari Shakkar Utpadak Karkhana Maryadit v. CCE 2015 TIOL- 1578-CESTAT-Del.
and consequently the mandatory equal penalty under Section 11AC would also not survive.
4. Ld. D.R. on the other hand cited the judgment of Allahabad High Court in the case of Dwarikesh Sugar Industries Ltd. vs. CCE, Meerut 2016 (334) E.L.T. 58 (All.) wherein it has been stated that cenvat credit on welding electrodes is not admissible. He also contended that even Apex Court in the case of Saraswati Sugar where it was held that supporting structures are neither components nor parts nor accessories of specified capital goods and so no cenvat credit is admissible thereon.
5. We have considered the contentions of both sides. As has been fairly admitted by the ld. Advocate for the appellant cenvat credit on iron and steel items amounting to Rs.2,33,58,461/- is not admissible in the light of the CESTAT Larger Bench decision in the case of Vandana Global Ltd. (supra). The Apex Court decision in this case of Saraswati Sugar (supra) cited by ld. D.R. is supportive of the decision of the Larger Bench of CESTAT in case of Vandana Global. However, it is a settled law now that when a matter had to be resolved by reference to the Larger Bench in the wake of divergent decisions by the Division Benches of CESTAT, the extended period of limitation cannot be invoked for the purpose of confirming the demand. (Judgments listed in para 3 refer). For example in the case of Ultratech Cement Ltd. (Supra) CESTAT held that the issue was under dispute and was settled against the appellant finally by Larger Bench of Tribunal in Vandana Global Ltd. (Supra) appellant cannot be held to suppress any material facts deliberately to evade duty or to avail ineligible credit and therefore, the demand for extended period was not sustainable. Similar view was held by Tribunal in the case of K.M. Sugar Mills Ltd. vs. CCE (Final order No. FO/54636/2014-EX. [BR] dated 21.11.2014).
7. As regards credit on Oxygen Gas and welding electrodes, we find that Chattisgarh High Court in the case of Ambuja Cement Eastern Ltd. vs. Commissioner of Central Excise, Raipur has held that welding electrodes used in repairs/maintenance of plant and machinery are covered under the scope of definition of input. Similar view was held by Rajasthan High Court in the case of Hindustan Zinc vs. Union of India. The Supreme Court in the case of Ramala Sahkari Chini Mills also held cenvat credit on welding electrodes used in maintenance of machines admissible. In the wake of these judgments we are in favour of allowing credit on welding electrodes notwithstanding Allahabad High Court to the contrary in the case of Dwarikesh Sugar Industries Ltd. (supra) cited by ld. D.R. The ratio for allowing cenvat credit on welding electrodes for repair /maintenance is equally applicable mutatis mutandis for allowing credit on oxygen.
8. In the light of the foregoing analysis, we set aside the impugned order and allow the appeal by way of remand to the primary adjudicating authority for de-novo adjudication with the following findings/directions:-
1) Extended period is not invokable in this case as a result of which the demand pertaining to the period beyond the normal period of one year is hit by time bar and no penalty under Section 11AC of Central Excise Act, 1944 would be attracted.
2) The credit on oxygen gas and welding electrodes is admissible.
3) The appellant will be given opportunity of personal hearing before denovo adjudication.
[Pronounced in the open Court on 27.07.2016] (R.K. SINGH) (S.K. MOHANTY) MEMBER (TECHNICAL) MEMBER (JUDICIAL) Anita ??
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