Custom, Excise & Service Tax Tribunal
Ultra Tech Cement Ltd vs C.C.E. & S.T.-Ahmedabad-Iii on 21 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad ^^^ Appeal No. : E/11884/2013 [Arising out of OIA-48-2013-AHD-III-SKS-COMMR-A-AHD Dated 20/03/2013Passed by Commissioner of Central Excise, CUSTOMS (Adjudication)-AHMEDABAD-III] Ultra Tech Cement Ltd, : Appellant(S) Unit-wankabori Cement Works Vs C.C.E. & S.T.-Ahmedabad-iii : Respondent (s)
Represented by :
Appellant(s) : Shri Dhaval Shah (Advocate) Respondent (s) : Shri L. Patra (Authorised Representative) For approval and signature :
Mr. P.M. Saleem, Hon,ble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes CORAM :
Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision :21/07/2015 ORDER No. A/11116/2015 Dated 21/07/2015 Per : Mr. P.M. Saleem, The issue before us in the present appeal is whether Nitrogen Cylinders and Welding Electrodes used by the appellants in their factory are eligible for Cenvat Credit.
2. Heard both sides. The learned counsel for the appellants submits that they have availed Cenvat Credit on Nitrogen Cylinders as capital goods, under the category of storage tank which is covered under the definition of capital goods under Rule 2(a)(vii) of the Cenvat Credit Rules 2004. They are availing Cenvat Credit on Welding Electrodes as capital goods under Rule 2(a)(iii). The learned counsel submits that there is no dispute that these goods are received in their factory, they are duty paid and they are utilized in their factory in or in relation to manufacture of final products. Therefore they are eligible for Cenvat Credit. He relied upon the decisions of this Honble Tribunal in the case of J.K. Steel and Alloys Vs. Commissioner of C. Ex., Bhavnagar [2009 (234) E.L.T. 191 (Tri.-Ahmd.)] and the case of Hindustan Zinc Ltd. Vs. Commissioner of Central Excise, Jaipur [2010 (251) E.L.T. 468 (Tri-Del)].
3. The learned Authorized Representative strongly refutes the contentions of the learned counsel and submits that the definition of capital goods is an inclusive definition and Nitrogen Cylinder cannot be treated as a storage tank and therefore the same is not eligible for Cenvat Credit. He also contented that Welding Electrodes cannot be considered as capital goods and therefore the same is also not eligible for Cenvat Credit. He relied upon the decision of the Honble Supreme Court in the case of Vikram Cement Vs. Commissioner of Central Excise, Indore [2005(187) E.L.T. 145 (S.C.)]
4. On perusal of the records, it is observed that the subject cylinders are used for filling Nitrogen gas which is used in the analytical laboratory as well as the process plant and these cylinders are used for the storage of Nitrogen gas which is utilized for in or in relation to manufacture of finished excisable goods. It is observed that the capital goods are defined to mean inter alia, storage tank used in the factory of the manufacturer of the final products. From the usage of the subject Nitrogen Cylinder, it is clear that they are used for storing the Nitrogen Cylinder and therefore serves the purpose of storage tank. This Honble Tribunal has held in the case of J.K. Steel and Alloys Vs. Commissioner of C. Ex., Bhavnagar (Supra) as follows:-
3) The contention of the Revenue is that cylinder has no role to play either directly or indirectly in the manufacture of finished goods. Therefore, it is not entitled for credit.
4) I find that during the relevant period the definition of capital goods was as under:-
Capital goods means:-
(i) All goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Tariff Act;
(ii)pollution control equipment;
(iii)components, spares and accessories of the goods specified at (i) and (ii) above;
(iv)moulds and died;
(v)refractories and refractory materials;
(vi)tubes and pipes of fittings thereof; and
(vii) storage tank, Used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office;
Cylinders are used for storage of gases which are further used for production in the factory. This aspect is not disputed by the Revenue. As per the definition of capital goods storage tank used in the factory of manufacture of final product are eligible for Modvat Credit as capital goods. As in the present case cylinders are used for storage of High Pressure gas used in the factory of production they are entitled for credit. Accordingly, impugned order is set aside and the appeal is allowed.
Following the same decision and above analysis, it is held that the subject Nitrogen Cylinder is a storage tank and eligible for Cenvat Credit.
5. As regards Welding Electrodes, it has been held that the Welding Electrodes are eligible for Cenvat Credit either as capital goods, or as inputs under Rule 2(g) of Cenvat Credit Rules 2002, by this Honble Tribunal the case of Hindustan Zinc Ltd. Vs. Commissioner of Central Excise, Jaipur [2010 (251) E.L.T. 468 (Tri.-Del.)], and the Honble High Court of Uttarakhand in the case of Commissioner of Central Excise Vs. ACC Glass containers Ltd.[2014 (34) STR 805 (Tri-Uttarakhand)]. In view of the same, it is held that the appellants are eligible for Cenvat Credit on welding electrodes.
6. In view of the above, the order-in-appeal is set aside and consequential relief, if any, is allowed.
(Dictated and pronounced in the Court) (P.M. Saleem) Member (Technical) Abhishek 2