Custom, Excise & Service Tax Tribunal
M/S. Binjusaria Metal Box Co. Pvt. Ltd vs Cc&Ce, Hyderabad-Iv on 17 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/21972 & 20271/2014 (Arising out of Order-in-Appeal No.25/201-IV)CE dt. 19/03/2014 & No.71/2013(H-IV)CE dt. 11/09/2013 passed by CC,CE&ST(Appeals), Hyderabad) 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. Binjusaria Metal Box Co. Pvt. Ltd. ..Appellant(s) Vs. CC&CE, Hyderabad-IV ..Respondent(s)
Appearance Shri K. Nagaraj Rao, Advocate 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:17/10/2016 Date of decision:17/10/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The above appeals arise out of the same show-cause notice and involve same issue for consideration. They were heard together and are disposed of by this common order.
2. The appellants were issued a show-cause notice dt. 11/10/2012 alleging, inter alia, irregular availment of credit on HR sheets, Boric acid and welding electrodes for the period 2008-09 to November 2010. After due process of law, the original authority allowed credit on Boric acid and disallowed the credit on HR sheets and welding electrodes. The demand in respect of the credit availed on these items along with interest was confirmed and imposed equal amount of penalty.
3. Being aggrieved, the appellants preferred appeal before the Commissioner(Appeals) and vide O-in-Appeal dt. 11/09/2013, the Commissioner(Appeals) remanded the matter to the original authority with the observation that the credit on HR sheets can be verified and allowed. With regard to welding electrodes used for repair and maintenance, the Commissioner(Appeals) observed that the welding electrodes used for repair and maintenance is not eligible for credit and in the remand order directed the adjudicating authority to verify the quantity/portion of welding electrodes used for repair and maintenance. Aggrieved by this order, the appellants have filed appeal No.E/20271/2014.
4. Meanwhile pursuant to the remand order, the adjudicating authority after de novo adjudication passed Order-in-Original dt. 31/01/2014 allowing the credit on HR sheets. In regard to direction in remand order pertaining to credit availed on welding electrodes, the adjudicating authority observed that it was not possible to quantify that portion of the welding electrodes used for repair and maintenance and on such situation, disallowed the credit availed on welding electrodes and confirmed the entire duty demand in regard to credit availed on welding electrodes and imposed penalty. Though appellant filed appeal before the Commissioner(Appeals) against the disallowance of credit on welding electrodes, the same was rejected. Appeal No.E/21972/2014 is filed against the said order passed by Commissioner(Appeals).
5. On behalf of the appellant, the learned counsel Shri K. Nagaraja Rao submitted that the issue presently posing for consideration is whether the credit is admissible on welding electrodes or not. The issue stands covered by the decision passed by the Tribunal in the case of India Cements Ltd. Vs. CC,CE&ST, Hyderabad-I&II [2016-TIOL-2423-CESTAT-HYD]. He submitted that the welding electrodes were used for repair and maintenance within the factory and without such repair activity, it is not possible to carry out the process of manufacturing in a commercially feasible manner.
6. Against this, the learned AR for the respondent reiterated the findings in the impugned orders. He submitted that the welding electrodes do not fall within the definition of inputs or capital goods and therefore credit is not eligible.
7. I have heard both sides. The issue whether credit is admissible on welding electrodes was analysed by this Tribunal in the case cited by the counsel for appellant wherein the judgment laid by the Honble Supreme Court in the case of Ramala Sahkari Chini Mills Ltd., UP Vs. CCE, Meerut-I [2010(260) ELT 321 (SC)] was followed. In view thereof, I hold that the credit availed on welding electrodes is admissible. The impugned orders are set aside and the appeals are allowed with consequential reliefs, if any.
(Pronounced and dictated in open court) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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