Custom, Excise & Service Tax Tribunal
M/S. Dsm Sugar vs Commissioner, Central Excise, ... on 5 June, 2013
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:05/06/2013
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the order for
Publication under 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?
Appeal No. E/1613/2010-EX(SM)
[(Arising out of Order-in-Appeal No. 90-CE/MRT-II/2010 dated 26.02.2010 passed by the Commissioner (Appeals), Central Excise, Meerut- (U.P.)]
M/s. DSM Sugar Appellant
Vs.
Commissioner, Central Excise, Meerut-II Respondent
Appearance:
Shri Arora, Advocate for the appellant.
Ms. Ranjana Jha, Joint CDR for the respondent.
Coram: Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 56922/2013 Per Rakesh Kumar:
The appellant are manufacturers of sugar and molasses chargeable to central excise duty. The period of dispute in this case is from December, 1995 to August, 1996. During that period, in addition, to availing cenvat credit of central excise duty paid on inputs, they were also availing cenvat credit on capital goods. The main dispute in this case is about eligibility for cenvat credit of distribution control system of co-generator, which is used as part of the distribution control system of machines and welding machines. All these items of capital goods were received in the appellants factory in December, 1995 and the appellant took total cenvat credit of Rs.5,94,395/- in respect of the same in accordance with the provisions of Central Excise Rules. In addition to this, the appellant took cenvat credit of Rs.28,926/- in respect of high speed diesel and took cenvat credit of Rs.10,074/- in respect of some other inputs and on the basis of invoices which were not in their name. The department was of the view that the appellant are not eligible for cenvat credit in respect of the above items of capital goods and inputs and accordingly, the show cause notice was issued for recovery of allegedly wrongly availed cenvat credit amounting to Rs.5,94,395/-. Accordingly, a show cause notice was issued for recovery of cenvat credit of Rs.5,94,395/-. This show cause notice in addition to this amount also sought recovery of cenvat credit in respect of other items which is not the subject matter of dispute. The show cause notice was adjudicated by the Addl. Commissioner vide order-in-original dated 31.12.2003 by which the above mentioned cenvat credit demand of Rs.5,94,395/- was confirmed along with interest and penalty of equal amount was imposed. On appeal being filed to the Commissioner (Appeals) against this order, the order passed by the Asstt. Commissioner was upheld. The Commissioner (Appeals) vide order-in-appeal upheld the Asstt. Commissioners order disallowing the cenvat credit of Rs.5,94,395/-. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both sides.
3. Shri Alok Arora, ld. Counsel for the appellant, pleaded that sofar as cenvat credit of Rs.5,94,395/- in respect of HSD and the cenvat credit availed on the basis of invoices not in the name of appellant is not concerned, he is confessing only the denial of cenvat credit in respect of the capital goods amounting to R.5,94,395/-, that sofar as distribution control system of power generation system is concerned, the same as is clear from the invoice is an item classifiable under Heading No.90.32 of the Tariff, that this item is used for meter protection and safety of transformer and generator, that the definition of capital goods as given in Rule 57Q of the Central Excise Rules covered the goods falling under Heading 90.32 of the Tariff, that in view of this, the denial of cenvat credit in respect of this item is not sustainable, that as regards co-generator system the same is part of the distribution control system of power generation system as it is used to charge DCS by giving electricity supply, that this item being a component of the distribution control system of power generation system would also be covered by definition of capital goods as stood during the period of dispute, that welding machine and welding electrodes have been specifically held as eligible for cenvat credit by the Larger Bench judgement of the Tribunal in the case of Jawahar Mills Ltd. reported in 1999 (108) ELT 47 (para-40) of the judgement, which has been upheld by the Apex Court vide judgement reported in 2001 (132) ELT 3 (SC) and that in view of this, the impugned order disallowing cenvat credit amounting to Rs.5,94,395/- in respect of the above items of capital goods is not sustainable.
4. Ms. Ranjana Jha, Joint CDR defended the impugned order of the reiterating the finings of the Commissioner (Appeals).
5. I have considered the submissions from both the sides and perused the records. The first disputed item is Distribution Control System of Power Generation System and the second item Low Frequency Transmission System is a component of DCS of the power generation system. The invoice in respect of the DCS mentions its classification under Heading No.90.32. There is no dispute that DCS System monitors and control temperature of the boiler pressure and give alarms if any abnormality observed in Boiler/Trubine. During the period of dispute, the definition of capital goods as given in Explanation 57 Q specifically covered the goods (other than of a kind used for refrigerating and airconditioning appliances) falling under Heading no.90.32) and also the components /spares and accessories of the goods of Heading No.90.32. Since the DCS System is an item falling under Heading No.90.32, the same was specifically covered by the definition of capital goods and the low frequency transmission system, which is part of the DCS System, would also covered by the definition of capital goods. In view of this, I hold that denial of capital goods is not sustainable. As the same specifically covered by definition of capital goods during the period of dispute.
6. As regards the welding machines and welding electrodes, the same were being used for repair and maintenance of the plant and machinery, I find that the Larger Bench of the Tribunal in the case of Jawahar Mills Ltd. reported in 1999 (108) ELT 47 (Tribunal) has specifically held that welding electrodes and welding machines is eligible for cenvat credit. This judgement of the Tribunal has been upheld by the Apex Court reported in 2001 (132) ELT 3 (SC). In view of this, the denial of cenvat credit in respect of these items is also not sustainable.
7. In view of the above discussion, the impugned order is upheld. Only in respect of denial of cenvat credit on HSD and on the basis of invoices not in the Appellants name, the impugned order regarding denial of cenvat credit in respect of the welding machine, welding electrodes and components of Distribution Control System of Co-generator plant and on this basis denial of cenvat credit amounting to Rs.5,54,395/- in respect of the above mentioned four items of the capital goods is set aside. The appeal is partly allowed with consequential relief.
( Rakesh Kumar ) Member (Technical) Ckp.
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