Custom, Excise & Service Tax Tribunal
Cce, Raipur vs M/S Hira Ferro Alloys Ltd on 2 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING : 26/08/2016. DATE OF DECISION : 02/09/2016. Excise Appeal No. 1331 of 2007 with Misc. Application No. 50768 of 2016 [Arising out of the Order-in-Appeal No. 41/RPR-I/2007 dated 22/02/2007 passed by The Commissioner (Appeals I), Customs & Central Excise, Raipur.] CCE, Raipur Appellant Versus M/s Hira Ferro Alloys Ltd. Respondent
Appearance Shri Yogesh Agarwal, Authorized Representative (DR) for the appellant.
Shri Krishnamohan Menon, Advocate for the Respondent.
CORAM : Honble Shri Justice Dr. Satish Chandra, President Honble Shri B. Ravichandran, Member (Technical) Final Order No. 53338/2016 Dated : 02/09/2016 Per. B. Ravichandran :-
This appeal is by Revenue against impugned order dated 22/2/2007 by Commissioner of Central Excise (Appeals), Raipur. The respondent are engaged in the manufacture of Ferro alloys liable to Central Excise duty. They were availing credit of duty paid on inputs and capital goods under the provisions of Cenvat Credit Rules, 2004. The dispute in the present appeal relates to eligibility of respondent for various credits for inputs and capital goods used in their captive power plant which is not included in the registered premises of the respondent. Various show cause notices were issued to the respondent to demand and recover Cenvat credit totally amounting to Rs. 1,98,66,239/-. The case was adjudicated by the Original Authority who disallowed credit of Rs. 67,61,510/- and allowed an amount of Rs. 1,31,74,684/-; penalty of Rs. 7 lakhs has been imposed on respondent. On appeal the learned Commissioner (Appeals) allowed the assessee/respondents appeal in full. Aggrieved, the Revenue is in appeal before us.
2. We have heard the learned Counsel for respondent and learned AR for Revenue. The respondents have filed a miscellaneous application for placing on record additional documents in the form of Chartered Engineers certificate dated 13/4/2016 alongwith detailed charts showing total quantity of goods used for availing the disputed credits. We find that these details are only codified chart form of already existing details as per records. Hence, in order to have proper appreciation of facts the same is taken on record. The miscellaneous application is accordingly allowed.
3. On the merits of the present appeal by Revenue, we note that the credits allowed by the Commissioner (Appeals) is contested mainly on the following grounds :-
(a) copper rod, copper etc. were used in the construction of supporting structure ;
(b) the structural items fabricated at site normally become immovable and loses identity of being excisable goods. When the items are not excisable goods credit on structural items cannot be allowed. Reliance is placed on Honble Bombay High Court decision in Tata Engineering & Locomotive Co. Ltd. vs. Union of India reported in 1997 (89) E.L.T. 463 (Bom.), Honble Supreme Courts decision in Quality Steel Tubes (P) Ltd. vs. CCE, U.P. reported in 1995 (75) E.L.T. 17 (S.C.) and Tribunals decisions in CCE, Indore vs. Seil Financial Services Ltd. reported in 2006 (195) E.L.T. 49 (Tri. Del.) and Indo Nissan Foods Ltd. vs. CCE, Delhi reported in 2003 (151) E.L.T. 664 (Tri. Del.)
(c) the final product, power plant that emerges is embedded to earth and falls under the category of civil construction/structure. To be eligible for credit as inputs used in manufacture of capital goods, the final goods emerging should be excisable capital goods. In CCE, Raipur vs. HEG Ltd. reported in 2010 (18) S.T.R. 446 (Tri. Del.), Tribunal denied credit on supporting structures and roof trusses. Various decisions of the Tribunal laid down that support structures are not capital goods.
4. We find that the whole thrust of the appeal by Revenue is that the steel, copper items used in fabricating support structures are not eligible for credit. The structures emerging are not capital goods and or immovable civil constructions. We have carefully considered the nature of impugned items and their usage as elaborated in the chart submitted by the Chartered Engineer. It has been categorically submitted that the steel items have not been used for making support or civil structure or for making foundation. The copper tube, rod were used for making bus duct/bar of channels, copper earthing and for instrumental in the captive power plant. A perusal of the chart submitted by the respondent indicates that the findings in the impugned order is being challenged by the Revenue mainly on general assertions and case laws. As noted, there has been no attempt to independently verify the nature of various items and their ultimate usage in order ascertain the respondents eligibility of credit on such items. The appeal is mainly on general principles and case laws without any specific material evidence to controvert the findings by the lower Authority. Taking into consideration the analysis made by the First Appellate Authority and the detailed chart submitted by the respondent regarding usage of impugned items, we find no merit in the present appeal by the Revenue. Accordingly, the same is dismissed.
(Order pronounced in open court on 02/09/2016.) (Justice Dr. Satish Chandra) President (B. Ravichandran) Member (Technical) PK ??
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