Custom, Excise & Service Tax Tribunal
M/S. L.H.Sugar Factories Ltd vs Cce, Meerut on 22 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
West Block No.2, R.K.Puram, New Delhi-110066.
Principal Bench, New Delhi.
E/2625/07-SM
(Arising out of Order-in-Appeal No.153-CE/MRT-II/2007 dt.26.7.07 passed by the Commissioner(Appeals), Meerut)
M/s. L.H.Sugar Factories Ltd. Appellant
Versus
CCE, Meerut Respondent
Appearance Sh. Kapil Vaish, CA For Appellant Sh. Sansar Chand, DR for Respondent Coram: Honble Mr. RAKESH KUMAR, MEMBER (TECHNICAL) Date of Hearing: 22.9.09 Order No.____________________ Per Rakesh Kumar:
The point of dispute in this case is as to whether the Aluminum Sheets which are used as part of lining of the boiler and have been used for replacing the worn out parts of boiler lining are eligible for Cenvat credit as capital goods. The Asstt. Commissioner vide order-in-original dt.13.2.07 disallowed the Cenvat credit on this item and confirmed Cenvat credit demand of Rs.10837/- alongwith interest and imposed penalty of equal amount on the appellant under Rule 15 of Cenvat Credit Rules,2004. The appellants appeal to Commissioner(Appeals) was dismissed by Commissioner(Appeals) vide order-in-appeal No.153-CE/MRT-II/07 dt.26.7.07. It is against the order of the Commissioner(Appeals) that the present appeal has been filed.
2. Heard both sides.
2.1 Shri Kapil Vaish, Chartered Accountant for the appellant pleaded that the aluminum sheets are used for replacing the old and worn out the parts of boiler; that the aluminum sheets are, therefore, spare part of the boiler and hence covered by the definition of capital goods; that as per the Boards circular No.276/110/96 dt.2.12.96 spare parts falling under any chapter heading which is part of the machines specified in the definition of capital goods, would be covered by the definition of the capital goods irrespective the charging heading under which it falls; that Honble Rajasthan High Court in the case of UOI vs Hindustan Zinc Ltd. reported in 2007(214)ELT.510(Raj.) has held that MS/SS Plates used in workshop are eligible for Cenvat credit as capital goods and Govt.s SLP against this order of Honble Rajasthan High Court was dismissed by the Honble Supreme Court; that same view had earlier been taken by the Tribunal in the case of L.H.Sugar Factories Ltd. vs CCE, Meerut-II reported in 2005(189)ELT.85(Tri.-Del,) wherein it was held that MS Plates used for maintenance of machinery and parts of capital goods are entitled for Cenvat Credit Rules,2004. In view of this, he pleaded that the impugned order is not correct.
2.2 Shri Sansar Chand, Ld. DR, defending the impugned order pleaded that from reading of the impugned order, it is clear that the aluminum sheets cannot be treated as part of the boiler; that it is rightly in the nature of construction and fabrication material and same cannot be treated as part of the capital goods. He also mentioned that they have not given any evidence on this item used of aluminum sheets.
3. I have carefully considered the submissions from both the sides and perused the records. In this case, there is no dispute about the fact that the aluminum sheet is used for repair and maintenance of the boiler as is evident from the certificate to this effect given by the Chief Engineer and countersigned by the Range Supdt. at page 26 of the appeal memo. When aluminum sheets are used for replacing the old and worn out parts of the boiler, the same have to be treated as part of the boiler and hence capital goods. Honble Rajasthan High Court in the case of UOI vs Hindustan Zinc Ltd.(Supra) has held that MS/SS plates used in workshop meant for repair and maintenance of machinery are eligible for Cenvat credit as capital goods and SLP against this judgment of Honble Rajasthan High Court has been dismissed by Honble Supreme Court in the case reported in 2007(214)ELT.A115(SC). I find that same view had earlier been taken by the appellant in L.H.Sugar Factoriess case reported in 2005(189)ELT.85 wherein it was held that MS Plates used for maintenance of machinery and of the capital goods are entitled for Cenvat Credit. In view of this, I hold that the impugned order denying the Cenvat credit in respect of aluminum sheet as capital goods is not correct and hence the same is set aside and the appeal is allowed with consequential relief.
Order dictated in the open Court.
(Rakesh Kumar) Member Technical km ??
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