Custom, Excise & Service Tax Tribunal
M/S. Cement Corporation Of India Ltd vs Cce, Hyderabad-I on 22 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/1168/2012 (Arising out of Order-in-Appeal No.105/2011(H-I)CE dt. 20/01/2012 passed by CC&CE(Appeals), Hyderabad-I) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Cement Corporation of India Ltd. ..Appellant(s) Vs. CCE, Hyderabad-I ..Respondent(s)
Appearance Shri Lalit Mohan Chandana, Advocate for the appellant.
Shri P.S. Reddy, Asst. Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:22/09/2016 Date of decision:22/09/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are engaged in the manufacture of ordinary Portland cement and cement clinkers and are availing the facilities of CENVAT credit of duty paid on inputs, input services and capital goods. During the course of verification of records, it was observed by the Department that during the period from April 2009 to December 2009, appellants availed CENVAT credit of duty paid on MS plates, MS angles, MS channels, MS sheets to the tune of Rs.4,66,155/- under the category of capital goods. A show-cause notice dt. 13/04/2015 was issued to the appellant alleging that the MS items do not fall under the category of capital goods and therefore proposing to recover the credit along with interest and also proposing for imposition of penalty. The appellant defended the notice by issuing a reply along with details of use of the MS items. After adjudication, the original adjudicating authority allowed credit of Rs.1,84,155/-. The appellant filed appeal before the Commissioner(Appeals) who upheld the disallowance of credit but reduced penalty from Rs.2,82,000/- to Rs.25,000/-. Being aggrieved by the disallowance of credit of Rs.2,82,000/- and penalty imposed, the appellant has preferred the present appeal.
2. On behalf of the appellant, learned counsel Shri Lalit Mohan Chandana submitted that the sole allegation raised in the show-cause notice is that appellant availed credit of MS items under the category of capital goods and that these items do not fall within the definition of capital goods. He adverted to the list of MS items used in the factory for various purposes and submitted that MS items have been used for fabrication of parts/components/spares / accessories of capital goods and also for repair and maintenance of machinery. He contended that as per the decision laid in Madras Cements Ltd. Vs. CCE, Hyderabad [2016(336) ELT 175 (Tri. Hyd.)] and India Cements Ltd. Vs. CESTAT, Chennai [2015(321) ELT 209 (Mad.)], the credit availed on MS items for fabrication of capital goods or parts and as per decision laid in CCE, Visakhapatnam Vs. RINL [2011(267) ELT 311 (AP)] also MS items used for repair and maintenance is eligible for credit.
3. The above contentions raised by the appellant was refuted by the learned AR Shri P.S. Reddy who submitted that the appellant has failed to establish by producing sufficient documents, the purpose of which the MS items were used within the factory. He argued that the appellant ought to have produced the issue slips, work orders and such other documents to establish the purpose for which the MS items were used. In absence of such evidence, the contention of the appellant cannot be accepted. He reiterated the findings in the impugned order and submitted that the Commissioner(Appeals) has analysed the contentions raised by the appellant and reduced the penalty which is just and reasonable.
4. I have heard both sides and perused records. The issue for consideration is whether the appellant is eligible for credit availed on MS items which according to the appellant were used for fabrication of parts/accessories/components of capital goods and also for repair and maintenance of various machinery and equipment. The appellant has filed detailed reply to the show-cause notice. Along with that replay, he has submitted an annexure in which the appellant has given details /description of the various MS items and also the purposes for which they were used. Again on 22/10/2010, the appellant has issued a further letter to the Department giving details of the use, purpose, for which the subject items were used. Though the learned AR submits that the appellant has not furnished sufficient documents to establish the purpose for which the subject items were used, the Department has no case that the MS items received in the factory were diverted in any manner. On perusal of the list showing the purpose for which the subject items were used by the appellant, it is seen that the MS channels were used for repairs/maintenance of L.S. crusher hoos, cooler MCDC dust etc. which are machinery used in the manufacture of cement. Plates were used in cooler, MCDC ducts, hot air ducts, hoopers, wagon tippler etc., elevator chains were used in the cement mill bucket elevators and MN castings were used in grate cooler. Similarly hydraulic nut was used in the cement mill and dumper assembly used in dumper which is part of the handling equipment. These descriptions show that the MS items were either used for fabricating the parts / components / accessories of capital goods or for repair and maintenance of such machinery and equipment. The issue whether MS items used for fabrication of capital goods / accessories or components and also whether they can be used for repair and maintenance is no longer res integra. The issue stands settled by the decisions relied upon by the appellant as well as by the decisions passed by the Tribunal in the following cases:-
a. CCE&ST, Tirupati Vs. Maishreni Ferro Alloys Pvt. Ltd.
[Final order No.A/30439/2016 dt. 05/05/2016] b. Madras Cements Ltd. Vs. CCE, Hyderabad [2016(336) ELT 175 (Tri. Hyde.)] c. India Cements Ltd. Vs. CESTAT, Chennai [2015(321) ELT 209 (Mad.)] d. CCE&ST, Hyderabad-III Vs. Tanmayi Ispat Pvt. Ltd.
[Final Order No.A/30038/16 dt.11/01/2016] e. Devashree Ispat Pvt. Ltd. Vs. CC,CE&ST, Hyderabad-III [Final Order No.A/30071/16 dt. 20/01/2016] f. CCE&Cus, Vizag-I Vs. Rastriya Ispat Nigam Ltd.
[2011(267) ELT 311 (AP)]
5. Following the same, I hold that the appellant is eligible for the credit. The impugned order is set aside and the appeal is allowed with consequential reliefs, if any.
(Pronounced and dictated in open court) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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