Custom, Excise & Service Tax Tribunal
M/S. Rashtriya Ispat Nigam Limited vs The Commissioner Of Central Excise & ... on 26 October, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE Appeal No:E/16/2008 (Arising out of Order-in-Original No. 21/2007-08 (RS) dated 27.09.2007 passed by the Commissioner of Central Excise & Customs, Visakhapatnam-I Commissionerate) 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. Rashtriya Ispat Nigam Limited Appellant Vs. The Commissioner of Central Excise & Customs Visakhapatnam-I Commissionerate Respondent
Appearance S/Shri G. Shiva Dass, Advocate and G. Venkatesh, Consultant, for the appellant Shri D.P. Nagendra Kumar, JCDR, for the Respondent CORAM MR. M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing:26.10.2010 Date of decision:26.10.2020 FINAL ORDER No._______________________2010 Per M.V. Ravindran This appeal is directed against the Order-in-Original No. 21/2007-08 (RS) dated 27.09.2007.
2. The relevant facts that arise for our consideration are the appellant herein took Cenvat credit of duty paid on various gasses, plates, sheets, rounds, angles, chemicals, rails, electrodes, welding flux, slugging wires, digital drives, digital receivers, MS cages, steel wire ropes, nickel cadmium, rubber goods, copper plate box, CCTV, wear resistant plate, cooling fan, delay timer, water treatment chemicals, oils, lubricants, etc. The lower authorities were of the view that the credit availed by the appellant during the period September, 2003 to December, 2006 are ineligible and coming to such a conclusion, six periodical show-cause notices were issued for denial of such credit availed by them. The appellants contested the show-cause notices before the adjudicating authority. The adjudication authority has come to the conclusion that the appellant is not eligible to avail the Cenvat Credit on the ground that the items on which credits were availed were not capital goods either by chapter heading or under rule. Coming to such a conclusion, the adjudicating authority disallowed the credit, sought interest and also imposed penalty under Rule 14 & 15 of the CENVAT Credit Rules, 2002/2004. Hence, this appeal.
3. The learned Counsel appearing on behalf of the appellant would submit that the items on which credits were availed are broadly classifiable under four different headings:
(i) Oxygen, Acetylene, Argon gas, MS Plates & HR sheets used for repair and maintenance of machinery;
(ii) Items such as wash oil, solar oil, water treatment chemicals, lubrication oils, greases, carbondi-odixe, G.P. coils, HDPE sacks, steel strappings which are used in relation to manufacture of final products.
(iii) Welding Electrodes, Graphite electrodes & Sulphuric Acid used in the auxiliary shops where the spares and frames are re-made or repaired.
(iv) Other Miscellaneous items.
3.1. For other miscellaneous items, he would draw our attention to the voluminous submissions made before the adjudicating authority. It is his submission that they have cited various decisions and judgments, which are in support of their contention that the appellants are eligible to avail the Cenvat credit on those items. He would submit and draw our attention to the findings of the adjudicating authority. He would submit that the adjudicating authority has, in two paragraphs, disposed of the replies made by the assessee. It is his submission that the credit on the supporting structures, etc. is eligible to avail as Cenvat credit, as held by the Hon'ble Supreme Court in the case of CCE, Jaipur Vs. M/s. Rajasthan Spinning & Weaving Mills Ltd. -- 2010-TIOL-51-SC-CX. As regards the credit availed on Welding Electrodes, he would submit that the recent judgment of the Hon'ble High Court of Chhattisgarh in the case of Ambuja Cements Eastern Ltd. Vs. CCE, Raipur -- 2010 (256) ELT 690 would cover the issue in their favour.
4. The learned JCDR, on the other hand, would submit that the issue of credit on Welding Electrodes has already been decided by the Hon'ble Supreme Court in the case of Hindustan Zinc Ltd. wherein the Rajasthan High Court's judgment has been upheld by the Apex Court. He would submit that the decision of the Tribunal in the case of Steel Authority of India Ltd. Vs. CCE, Ranchi -- 2008 (222) ELT 233(Tri.-Kolkata) has been upheld by the Hon'ble Supreme Court by dismissal of an SLP filed by the assessee. He would also submit that the order of the Larger Bench of the Tribunal in the case of Vandana Global Ltd. & Ors. -- 2010-TIOL-624-CESTAT-DEL-LB will also cover the case in favour of the Revenue inasmuch as the items, which are used for repair of the machinery and the supporting structures, would become ineligible for availment of Cenvat credit.
5. The learned Counsel, in rejoinder, only submit that the order of the Larger Bench in the case of Vandana Global Ltd.(supra) was on the issue of availment of Cenvat credit of the duty paid on the inputs and not on the capital goods. It is his submission that in the issue in hand, the question was availability of credit on capital goods. He would submit that the judgment of the Hon'ble Supreme Court, in the case of Rajasthan Spinning & Weaving Mills (supra), has clearly brought out what would be an "accessory" and eligibility to credit, squarely covers the issue in favour of appellant..
6. After considering the submissions made in detail by both sides and on perusal of the records, we find that the appellant herein, during the course of personal hearing before the adjudicating authority, had given detailed explanation regarding each and every item on which credit was availed. On perusal of which, we find that the appellant has been able to explain the use of the said items within their plant/factory premises and we are of the prima facie view that the credit availed by them cannot be denied. At the same time, we find that the adjudicating authority, while confirming the demands, has recorded only the following findings:-
"7. Also it is seen that under rule 2(b) 2(a) of Cenvat Credit Rules, 2002/2004, capital goods means all goods falling under chapter 82, 84, 85, 90, 68.02, 68.01 and pollution control equipment besides components, spares and accessories of goods mentioned above. Under rule 3 of Cenvat Credit Rules, 2002/2004 the manufacturer is allowed to take credit of specified duty paid on capital goods procured for use in their factory subject to condition that such capital goods confirm to definition and chapter heading/sub heading mentioned under rule 2 ibid.
8. The assesses are engaged in manufacture of various iron & steel products falling under Chapter 72 of Central Excise Tariff Act, 1985. They have procured several items like copper plated boxes falling under CHSH 7409.10, G.P. Coils CHSH 7209.20 channels (7216.10) angles (7216.90) plates (7208.11). These items do not answer the description of either capital goods or components or parts thereof covered by definition under rule 2 of Cenvat Credit Rules, 2002/2004. Consequently credits availed are irregular. The entire amount is required to be reversed/recovered together with interest under rule 14 of Cenvat Credit Rules, 2004. they are also liable for penalty under rule 15 ibid."
7. From the above reproduced findings, it can be seen that the adjudicating authority has not given due consideration to the detailed submissions made by the appellant before her. She has also not considered the ratio of the various case-laws, which were cited before her.
8. We also find that in the appellant's own case, Tribunal has held in their favour, for the eligibility of credit on certain items, which are also in dispute in the current appeal before us. We also find that the adjudicating authority did not consider the recent judgments handed down by the Hon'ble Supreme Court as well as various High Courts and the Tribunal on the issue of cenvat credit on items, which is sought to be availed by the appellant.
9. In view of this, we set aside the impugned order and remand the matter back to the adjudicating authority to re-consider the issue afresh in the light of the detailed explanation given by the appellant, and also the various case-laws, which are cited. Needless to say that the adjudicating authority shall follow the principles of Natural Justice and dispose the matter within a period of three months from the receipt of this order either from Registry or on being served by the appellant/assessee. The appeal is thus allowed by way of remand.
(Operative portion of the order pronounced in open Court on conclusion of hearing on 26.10.2010) (B.S.V. MURTHY) Member (T) (M.V. RAVINDRAN) Member (J) /pr/