Custom, Excise & Service Tax Tribunal
M/S. Tata Steel Processing & ... vs Cc,Ce&St, Guntur on 22 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/21035/2014 (Arising out of Order-in-Appeal No.04/2014(G)CE dt. 08/01/2014 CCE,C&ST(Appeals), Guntur) 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. Tata Steel Processing & Distribution Ltd. ..Appellant(s) Vs. CC,CE&ST, Guntur ..Respondent(s)
Appearance Shri K. Vaitheeswaran, Consultant 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 appellant has filed the above appeal against the order passed by Commissioner(Appeals) which disallowed CENVAT credit taken on the duty paid on steel items and also on diesel generator.
2. The appellants are engaged in the manufacture of iron and steel profiles plates and are availing the facilities of CENVAT credit of inputs/capital goods and input services. A show-cause notice was issued alleging that the appellants have irregularly availed credit on MS plates, angles and diesel generator under the category of capital goods for the period December 2008 to September 2010. The show-cause notice also alleged irregular availment of credit on input service in regard to construction of compound wall. After adjudication, the original authority disallowed the credit on all the four counts. In appeal, the Commissioner(Appeals) allowed the credit on input services availed for the purpose of construction of compound wall and disallowed the credit availed under the category of capital goods. Being aggrieved, the appellant is now before the Tribunal.
3. On behalf of the appellant, the learned counsel Shri K. Vaitheeswaran submitted that the MS plates and angles were used for making Surface Testing Bench; that Surface Testing Bench falls under Chapter 90 of the CETA, 1985 and therefore the goods would fall under the category of capital goods and are eligible for credit. That MS items were also used for steel shots in shot blasting machines. In regard to the eligibility of credit, he placed reliance on the judgment laid in Mukand Ltd. Vs. CCE, Mumbai-II [2006(205) ELT 886 (Tri. Mumbai)] and in CC&CE, Indore Vs. HIM Technoforge Ltd. [2010(252) ELT 551(Tri. Del.)] and contended that the issue whether steel shots are capital goods or not is settled by these judgments. The 3rd count on which credit is disallowed is that of the generator used in the factory. The learned counsel submitted that the credit was disallowed for the reason that the invoice does not contain the name and address of the appellant. He explained that the said generator was initially supplied to their unit at Singur and thereafter due to unforeseen circumstances whereby the plant at Singur could not be commenced, the generator was transferred to the appellant unit. The said fact has been endorsed on the reverse side of the invoice. He also submitted that the unit at Singur had not taken credit on the generator set and therefore contended that the disallowance of credit is without basis.
4. On behalf of the Department, the learned AR Shri P.S. Reddy reiterated the findings in the impugned order. He also contended that the invoice pertaining to the generator does not contain the name and address of the appellant but contains the adof Singur and that appellant is not eligible for the credit. He submitted that the first appellate authority has rightly denied the credit on the subject items.
5. I have heard both sides. The first issue is whether the appellant is eligible for the credit availed on the steel items used for making the Surface Testing Bench. Chapter 90 of the CETA 1985 shows the entry of Surface Testing Bench at 90312000. Therefore the said item falls within the definition of capital goods and therefore the denial of credit is unjustified. The next issue is whether steel shots are capital goods or not and whether credit is admissible on MS items used for steel shots. The issue stands decided in the cases/judgments relied upon by the learned counsel for the appellant. In Mukand Ltd. (supra), the Tribunal has analysed the issue and held in favour of assessee which reads as under:-
6.?I have heard both the sides at length on the issue involved in the appeal. The issue is squarely covered in favour of the assessee by the decision in the case of CCE, Kanpur v. Bharat Industries reported in 2000 (120) 362 (Tribunal). It is observed therein that whether it is not disputed that the Steel Shot used in or relation to manufacture of the final products, Modvat credit is admissible irrespective of the fact whether they are capital goods or not under Rules 57A and 57Q of the Central Excise Rules, 1944. Therefore in view of settled position of law the appeal filed by the assessee is allowed, while setting aside the impugned order passed by both the authorities in the law.
6. It is submitted by the learned counsel that these steel shots are used in the shot blasting machines and therefore are covered under the category of capital goods.
7. The 3rd issue is regarding the denial of credit on the diesel generator set. On perusal of the invoice, it is seen that the name and address shown in the invoice reads as Tata Ryerson Limited, Singur, West Bengal. The learned counsel for appellant has submitted that the said generator was transferred from Singur and received at the appellants factory as the unit at Singur could not be commenced due to unforeseen circumstances. The said fact has been endorsed on the reverse side of the invoice. As per the proviso to Rule 9(2) of the CENVAT Credit Rules, in case of any doubt with regard to the particulars mentioned in the invoice, the concerned officer on being satisfied that the credit/duty has been properly accounted for has the discretion to allow the credit. When the Department has no dispute with regard to the receipt of the generator within the factory or with regard to the payment of duty, in my view, the denial of credit is unjustified. It is also submitted by the counsel for appellant that the factory at Singur did not take off at all and therefore credit was not availed at Singur.
8. From the foregoing discussions, I hold that the disallowance of credit as per the impugned order is without basis. The impugned order is set aside. 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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