Custom, Excise & Service Tax Tribunal
M/S. Sakta Inx. (India) Limited vs C.C.E.- Jaipur-I on 1 November, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI COURT NO. III Date of hearing/Decision: 01.11.13 Appeal No. E/643/2011-EX[SM] M/s. Sakta Inx. (India) Limited Appellant Vs. C.C.E.- Jaipur-I Respondent
[Arising out of Order-In-Original No.159/2009-2010(Dem),, dt.26.02.2010, passed by Commissioner (Appeals) Central Excise, Jaipur-I] For approval and signature:
Honble Rakesh Kumar, 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?
Present: Sh. Sh. S.C.Kamra, Advocate - for the Appellant Sh. M.S.Negi, AR - for the Respondent Coram: Rakesh Kumar Member (Technical) FINAL ORDER NO. 58174/2013 Per Rakesh Kumar:-
1. The Appellant are manufacturers of printing ink chargeable to central excise duty. For storage of Varnish, which is an input for manufacture of printing ink, they have constructed storage tanks for which duty paid steel items such as HR Plates, S.S.Plates, angles, channels etc. were used during March07 to April08 and in respect of these steel items they took Cenvat Credit of Rs. 2,12,348/-. A Show Cause Notice was issued to them for denying the Cenvat Credit and its recovery along with interest and imposition of penalty on the ground that steel items such as HR Plates, S.S.Plates, angles, channels etc. are not covered by the definition of capital goods. The Jurisdictional Assistant Commissioner vide order-in-original dt.26.02.2010 confirmed above mentioned Cenvat Credit demand along with interest and imposed penalty of equal amount on the Appellant. In the appeal filed to Commissioner (Appeals), the Appellant pleaded that the steel items, in question, have been used for fabrication of tanks which are capital goods and therefore the steel items, in question, would be eligible for credit as inputs. But this plea was not accepted by the Commissioner (Appeals) on the ground that the tanks fabricated are embedded to earth and hence being immovable property, are not goods and that the capital goods covered by the definition of this term in Rule 2(a) of Cenvat Credit Rules, 2004 must be good. Against this order of the Commissioner (Appeals) this appeal has been filed.
2. Heard both the sides.
3. Sh. S.C.Kamra, learned counsel for the Appellant, pleaded that the tanks fabricated by using steel items are not embedded to earth. In this regard he reproduced the photographs of the tanks and pleaded that from the photographs it is clear that these tanks are not embedded to earth and have to be treated as movable property and hence would be covered by definition of capital goods. He also cited Tribunals Final Order No. 937/2012 SM(BR) dt. 10.07.2012 in the Appellants own case in respect of similar steel tanks fabricated for storage of oil wherein the Tribunal ordered verification of the Appellants plea as to whether the tanks are embedded to earth and when on verification it was found that the tanks are not embedded to earth, the appeal was allowed permitting the Cenvat Credit in respect of steel items used for fabrication of tanks. He, therefore, pleaded that in this case also similar verification may be ordered.
4. Sh. M.S.Negi, learned DR, while defending the impugned order by reiterating the findings of the Commissioner (Appeals), stated that he has no objection if matter is remanded to the Commissioner (Appeals) for de-novo adjudication after verification of the Appellants plea that tanks, in question, fabricated by using the steel items are not embedded to earth tanks.
5. I have considered the submissions from both the sides and perused the records. The only point of dispute in this case is as to whether the steel items such as HR Plates, S.S.Plates, angles, channels etc. used for fabrication of tanks for storage of Varnish are eligible for Cenvat Credit. These steel items would be eligible for Cenvat Credit as input only if the same are proved to have been used for manufacture of capital goods for use in the factory. Tanks is a items which is specifically mentioned in the definition of the capital goods given in Rule 2(a) of the Cenvat Credit Rules. However the definition of capital goods as given in Rule 2(a) starts with the words -
The capital goods means:-
the following goods namely .:-
From the above words in the definition of capital goods it is clear that anything mentioned after the words the following goods namely has to be good. It is well settled law that the word goods covers only the movable property not to immovable property. Therefore the storage tanks mentioned in the definition of capital goods have to be movable tanks not embedded to earth tanks which would be immovable property.
6. However, in this case while the Appellants plea is that the tanks, in question, are not embedded to earth and are movable, the Commissioner (Appeals) has given a contrary finding. This matter can be resolved only by physical verification for which this matter would have to be remanded.
7. In view of the above discussion, the impugned order is set aside and the matter is remanded to CCE (Appeals) for de-novo decision after verification through the Jurisdictional Assistant Commissioner for ascertaining as to whether the steel tanks made out of the HR Plates, S.S.Plates, angles, channels etc. are embedded to earth tanks or otherwise Cenvat Credit in respect of steel items would be admissible only if tanks are not embedded to earth. The Appeal stands dispose of as above.
(Order dictated in the open court) (Rakesh Kumar) Member (Technical) S.Kaur 1