Custom, Excise & Service Tax Tribunal
Cce, Lucknow vs M/S.Bajaj Hindustan Ltd on 3 March, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEBER BENCH
Excise Appeal No.818 & 17 of 2009-SM
(Arising out of Order-in-Appeal No.168-CE/LKO/2008 & No.169-CE/LKO/2008 dated 11.11.2008 passed by the CCE (A), Lucknow)
For approval and signature:
Honble Mr. Ashok Jindal, 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 Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
CCE, Lucknow Appellants
Vs.
M/s.Bajaj Hindustan Ltd. Respondent
Present for the Appellant: Shri Anil Khanna, SDR
Present for the Respondent: Shri Bipin Garg, Advocate
Coram: Honble Mr. Ashok Jindal, Member (Judicial)
Date of Hearing/Decision: 03.03.2011
ORDER NO._______________
PER: ASHOK JINDAL
The Revenue is in these appeals against the impugned orders wherein the credit availed by the respondents on welding electrodes was allowed on the ground that the same has been used for fabrication of their capital goods.
2. The facts of the case are that the respondents are manufacturers of sugar. During the course of repair and maintenance of their machinery they require welding electrodes. The show cause notices were issued to the respondents that the welding electrodes are falling under chapter heading 8311 in the nature of consumables and other structural items. Hence, the respondents are not entitled to claim the credit of duty paid on these welding electrodes. The show cause notices were adjudicated where the issue framed whether the welding electrodes were used for fabrication and manufacture of capital goods which are further used for manufacture of final goods can qualify as input or not. The adjudicating authority confirmed the demand relying upon the decision of this Tribunal in the case of G.S.Mill Aira [Final Order No.299/07-SM(BR) dt.9.2.07]. On appeal before the Commissioner (Appeals), the claim of the respondents was allowed by setting aside the order in original. Aggrieved by the said order, the Revenue is before me.
3. Learned SDR submitted that in this case the welding electrodes have been used for maintenance for expansion of their plant and machinery as admitted by the respondents and further submitted that in the case of Vandana Global Ltd.-2010 (253) ELT 440 (Tri.-LB), this Tribunal has held that whether plant or structure embedded to earth, the assessee is not entitled for the credit on the items used for manufacturing of that plant/structure. He also relies on the decision of the Apex Court in the case of Vikram Cements vs. CCE, Indore 2005 (187) ELT 145 (SC). He also relies on the decision of the Apex Court in the case of SAIL vs.CCE-2008 (229) ELT A27 (SC). Learned SDR further submitted that the credit of capital goods is available on the items which are excisable goods covered under the definition of capital goods under Cenvat Credit Rules, 2004 used in the factory for manufacture of inputs which are covered by the definition of inputs under Rule 2(k) of Cenvat Credit Rules, 2004. He further submitted that in the case of Ramala Sahkari Chini Mills vs. CCE, Meerut-2010 (260) ELT 321 (SC) wherein the definition of inputs itself has been questioned. So the impugned order is to be set aside.
4. On the other hand, learned Advocate for respondents submitted that the issue whether the welding electrodes used in the repair and maintenance of plant and machinery and whether the assessee is entitled for the credit on the inputs has been decided by the Honble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur-2010 (256) ELT 690 and the Honble Karnataka High Court in the case of CCE, Bangalore-I vs. Alfred Herbert (India) Ltd.-2010 (257) ELT 29 (Kar.), in both the cases, Honble High Courts have held that welding electrodes used in the repair and maintenance of the plant and machinery are entitled for credit. Hence, the impugned orders may be upheld and the appeals filed by the Revenue are rejected.
5. Heard and considered.
6. I have considered the submissions of learned SDR and the findings that the issue as per show cause notices issued was that whether the welding electrodes used for fabrication and manufacture of capital goods which are further used for manufacture of final products qualify for availement of credit as inputs as per Rule 2(k) of Cenvat Credit Rules, 2004 or not. But the decision in the case of Vandana Global Ltd. is not applicable to the facts of this case as in that case the issue before the Larger Bench of this Tribunal was that whether plant or structure embedded to earth, the assessee is not entitled for the credit on the items used for manufacturing of that plant/structure. This is not the case here. The case of the Vikram Cements vs. CCE, Indore is also not relevant to the facts of this case as that case is dealt with capital goods. The case of relied upon in the case of SAIL vs. CCE (supra) is also not relevant to the facts of this case as the said decision has been discussed by the Honble Karnataka High Court in the case of Alfred Herbert (India) Ltd. (supra) that said decision is for the denial of credit to which earlier rules were applicable and the present Cenvat Credit Rules are not applicable. In the case of Ramala Sahkari Chini Mills vs. CCE, the department has failed to produce any such order of the Apex Court.
7. I find that the issue has been dealt by the Honble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur and Honble Karnataka High Court in the case of CCE, Bangalore-I vs. Alfred Herbert (India) Ltd. wherein both the Honble High Courts have held that welding electrodes used in the repair and maintenance of the plant and machinery are entitled for credit. Also on the point judicial pronouncement by the highest court has held by the Honble Bombay High Court in the case of Mercedes Ben India Pvt.Ltd. vs. Union of India-2010 (252) ELT 168 (Bom.). Accordingly in these appeals, the respondents are entitled for credit availed by them on welding electrodes which are used by them for fabrication and repair and maintenance of their capital goods. Accordingly, I do not find any infirmity in the impugned orders and the same are upheld. The appeals filed by the Revenue are rejected.
(pronounced in the open court) (ASHOK JINDAL) MEMEBR (JUDICIAL) mk 1 5