Custom, Excise & Service Tax Tribunal
M/S. Madras Cements Ltd vs Cce & St, Trichy on 12 April, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/41702/2013
(Arising out of Order-in-Appeal No. 53/2013 dated 30.04.2013 passed by the Commissioner of Central Excise (Appeals), Trichy).
M/s. Madras Cements Ltd. : Appellant
Vs.
CCE & ST, Trichy : Respondent
Appearance Shri R. Parthasarathy, Adv., for the Appellant Shri R. Subramanian, AC (AR), for the Respondent CORAM Honble Shri P. K. Choudhary, Judicial Member Date of Hearing : 11/03/2016 Date of Pronouncement: 12/04/2016 FINAL ORDER No. 40608 / 2016 The appellant filed this appeal against the Order-in-Appeal dated 30.04.2013, passed by the Commissioner (Appeals).
2. The brief facts of the case are that the appellants are engaged in the manufacture of cement falling under Chapter 25 of Central Excise Tariff Act, 1985 and availing Cenvat Credit on various inputs and capital goods used in relation to the manufacture of the final product. During audit by the department it was noticed that they had availed cenvat credit on Welding Electrodes for the period July 2009 to May 2010 for an amount of Rs. 1,15,463/-. Since it was not an input for the manufacture of cement, after pointing out by the department, the appellant assessee reversed the cenvat credit taken on Welding Electrodes in June 2010.
3. Show cause notice was issued proposing demand for recovery of cenvat credit taken on ineligible inputs Welding Electrodes, appropriation of the amount reversed by the appellant assessee, demand of interest and proposed imposition of equivalent penalty under Section 11 AC of the Central Excise Act, 1944 read with Rule 15(2) of Cenvat Credit Rules, 2004. On adjudication, the Commissioner confirmed the demand, appropriated the amount reversed by the appellant and interest under Section 11 AB read with Rule 14 of CCR, 2004 and imposed equal penalty under Section 11 AC of the Central Excise Act, 1944 read with Rule 15 (2) of CCR, 2004. On appeal, the Ld. Commissioner (Appeals) upheld the order of the adjudicating authority. Aggrieved by the order of the Ld. Commissioner (Appeals), the appellants are before this Tribunal.
4. Shri R. Parthasarathy, Consultant appearing on behalf of the appellant assessee submits that they have availed cenvat credit on welding electrodes as they have used them for repair and maintenance of the plant and machinery which are used in the manufacture of final products. He relied on this Tribunals Final Order No. 41781 41782/2015 in the case of India Cements Ltd. Vs. CCE, Trichy, wherein the Tribunal following the decision of the Honble High Court of Madras reported in 2006-TIOL-458-HC-MADE-CX and the Tribunals final order in the case of Tamil Nadu Newsprint and papers Ltd. Vs. CCE, Trichy 2015-TIOL-267-CESTAT-MAD, has held that the appellants are eligible for input credit availed on electrodes used for repair and maintenance of the plant and machinery which are used for manufacture of final product. He submitted that since the issue now stands settled by the Tribunal in the above cases, pleaded to set aside the impugned order and allow their appeal.
5. The Ld. AR, Shri R. Subramanian, AC., appearing on behalf of the Revenue reiterated the findings of the OIA and submitted that the Commissioner has rightly held that the appellants are not eligible for credit availed on welding electrodes and rightly imposed equal penalty under Section 11 AC of the Central Excise Act, 1944 read with Rule 15 (2) of CCR, 2004. He submitted that the impugned order is to be upheld.
6. After hearing both sides and on perusal of the records, I find that the short issue involved in this appeal relates to eligibility of Cenvat credit availed on welding electrodes used in relation to the manufacture of final products.
(i) This is the second round of litigation. On the previous occasion, vide Final Order No. 40016/2013 dated 18.01.2013, the matter was remanded to the Commissioner (Appeals) for a fresh hearing.
(ii) The issue as to the eligibility of credit on welding electrodes which are used as inputs for repair and maintenance of plant and machinery is covered by the following rulings:
a) Madras Cements Limited Vs. CCE & ST, Guntur, Andhra Pradesh, vide the Final Order No. 21050/2015, wherein the earlier judgment vide Final Order No. 20206/2015 dated 13.03.2015 was followed.
b) Tamil Nadu News Prints and Papers Limited Vs. CCE, Trichy, vide Final Order No. 40585/2014 dated 05.09.2014.
c) India Cements Limited Vs. CCE & ST, vide Final Order No. 41781-41782/2015 dated 01.01.2016.
(iii) All the judgments referred supra cover the disputed points on eligibility of CENVAT credit on welding electrodes. The appellants contention that the definition of `Input is very wide and that welding electrodes were used in or in relation to the manufacture of final product whether directly or indirectly and the expression used in the factory of manufacturer are both satisfied in the instant case.
7. By respectfully following these judgments and the very definition of `input, the impugned order is set aside with consequential relief if any to the appellant.
(Order Pronounced in the open court on 12/04/2016) (P.K. CHOUDHARY) Judicial Member BB/RKP 1