Custom, Excise & Service Tax Tribunal
Kog Ktv Food Products India Pvt Ltd vs Tirunelveli on 17 August, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/163/2012
(Arising out of Order-in-Appeal No. 6/2012 dated 17.1.2012
passed by the Commissioner of Central Excise (Appeals),
Madurai)
M/s. KOG-KTV Food Products India P. Ltd. Appellant
Vs.
Commissioner of GST & Central Excise
Tirunelveli Respondent
Appearance Shri Hari Radhakrishnan, Advocate for the Appellant Shri S.Govindarajan, AC (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Hon'ble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 17.08.2018 Final Order No. 42287 / 2018 Per Bench Brief facts are that the appellants are engaged in manufacture RPD palm oil / palmolein oil and palm fatty acid distillate. They were availing the facility of CENVAT credit on inputs, capital goods etc. They availed CENVAT credit of duty paid on inputs like steel HR coil, steel plates, MS channel, MS plates etc. for the construction of three storage tanks of 3600 2 MT each in capacity which are used for storing crude palm oil, palm oil and palmolein oil. Department was of the view that the said items do not fit into the definition of inputs and therefore are not eligible for credit. Show cause notice was issued for the period August 2008 to January 2009 proposing to disallow CENVAT credit of Rs.21,34,709/- availed on MS sheets, steel plates, MS angles etc. After due process of law, the original authority confirmed the demand, interest and also imposed penalties. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant, ld. counsel Shri Hari Radhakrishnan submitted that the appellant had used the impugned steel items for fabrication of storage tanks at site. The storage tanks so manufactured is mentioned as capital goods in definition of CENVAT Credit Rules. Denial of credit on the ground that the impugned storage tanks are embedded to earth after fabrication and has become immovable property is not legally correct. The adjudicating authority has wrongly interpreted the decision in the case of Vandana Global Ltd. Vs. Commissioner of Central Excise - 2010 (253) ELT 440 (Tri. LB) to deny the credit. He relied upon the decision in the case of Thiru Arooran Sugars - 2017 (355) ELT 373 (Mad.) and argued that on identical issue, the jurisdictional High Court has held that credit is eligible.
3
3. The ld. AR Shri S. Govindarajan supported the findings in the impugned order. He submitted that as per the decision relied in Vandana Global Ltd. (supra), after fabrication the goods become attached to the earth and being immovable property are non-excisable. Therefore, the credit is not eligible on such steel items.
4. Heard both sides.
5. The issue is whether the appellants are eligible for credit on the impugned steel items which were used for fabrication of storage tanks used for storing refined palm oil, crude palm oil. The said issue has been considered in various decisions and in the case of Thiru Arooran Sugars (supra), the Hon'ble High Court of Madras has held that the credit on such items used for manufacture of capital goods is eligible. The decision in Vandana Global (supra) was also referred to by the Hon'ble High Court. Following the said decision, we are of the view that the disallowance of credit is unjustified and the demand cannot be sustained. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Operative portion of the order was
pronounced in open court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex