Custom, Excise & Service Tax Tribunal
M/S. Raymond Ltd vs Commissioner Of Central Excise on 10 October, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 6287 of 2004-EX[DB]
[Arising out of Order-In-Appeal No.11/CE/BPL/2004 dated 14.01.2004 passed by Commissioner of Customs & Central Excise (Appeals), Bhopal]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
Honble Mr. Manmohan Singh, Technical Member
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?
M/s. Raymond Ltd. Appellant
Vs.
Commissioner of Central Excise, Respondent
Bhopal Appearance:
Shri Sparsh Bhrgav, Advocate for the Appellants Shri B.B. Sharma, DR for the Respondent Coram:
Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. Manmohan Singh, Technical Member Date of Hearing : 10.10.2013 ORDER NO . FO/ 58225 /2013-EX(Br) Per Ms. Archana Wadhwa(for the Bench):
After hearing both sides, we find that dispute in the present appeal relates to availability of Cenvat credit of duty paid on various items which the appellant claimed as capital goods.
2. In respect of first four items, it is better to reproduce the relevant portion of the impugned order of Commissioner (Appeals) Aquat and Boiler Sl.No. 26 of SCN dated 04.11.94), Unipro 38 and Emklo 220 (Sl. No. 24 & 25 of SCN dated 25.11.94) and Component Glue (Sl. No. 52 of SCN dated 13.3.95). All these items are in the nature of inputs. The appellants themselves have admitted in their EA-1 submission that these items are inputs. The appellants contention is that all these items have been received in their factory and used in the manufacture of excisable goods therefore, they are eligible inputs under Modvat scheme. They further stated that denial of Modvat credit on the ground of procedural non-compliance is not proper. In this regard, I find that appellants have claimed Modvat credit under Rule 57Q whereas, items under question are entitled for credit under Rule 57A. The Honble Tribunal in the case of M/s. Surya Roshni vs. CCE reported in [2001 (128) ELT 293 (Tri-LB)] has held that if a declaration is filed under Rule 57A, it cannot be treated as filed under Rule 57Q and vis-`-vis, therefore, applying the same ratio, I also hold that credit is not admissible to the appellants on these items.
3. It is clear from the above, that the appellate authority has not disputed the fact that Cenvat credit was available to the assessee in terms of the provisions of Rule 57A. He is denied the credit only on the short ground that the appellant claimed it under Rule 57Q. We find that the Larger Bench of the Tribunal in the case of CCE, Meerut vs. Modi Rubber Ltd. [2000 (119) ELT 197 (Tri-LB)] has held that declaration filed by the assessee under Rule 57A can be considered for citing the benefit under Rule 57 Q and vice versa. Inasmuch as there is no dispute about the availability of credit, we set aside the said operation of impugned order of Commissioner (Appeals) and allow the Cenvat credit.
4. As regards the denial of credit on Hydraulic Power Hack Saw, we reproduce relevant observations of the Commissioner (Appeals) as under:-
Modvat credit has also been denied on the Hydraulic Power Hack Saw (Sl.No. 51 of the SCN dated 13.3.95 on the ground that the same is being used for repairs in the workshop and not for manufacture of goods. The appellants have not contended on this issue except to state that denial of Modvat credit vide the impugned order dated 1.4.03 is against the settled position of law and hence not maintainable. In this matter, I find that the Honble Tribunal in the case of National Steel Industries Ltd. vs. CCE reported in [2002 (149) ELT 735 (Tri-Del)] has held that credit is not admissible on the capital goods which are used for repair and maintenance of the machineries in the workshop. Therefore, I also find that Modvat credit is not admissible on this good.
5. Learned advocate submits that definition of capital goods was amended vide notification No. 14/96-CE (NT), with effect from 23.7.96 defining capital goods by referring to Chapter heading / sub-heading of the Central Excise Tariff. The said amendment has been held to be clarificatory in nature and hence, retrospective in operation. Inasmuch as Hydraulic power hack saw is classifiable under Chapter 84, which was one of the specified chapter and was further classifiable under sub-heading 84.66 which was excluded from Chapter 84 in terms of said definition, the same would get covered by the definition of capital goods. As regards the objection of the learned DR that the credit has been denied on the ground that said capital goods was used for repair and maintenance of workshop and not for manufacture of goods, we find that without repair and maintenance activities of other capital goods, it is not possible for an assessee to manufacture their final product. As such, such capital goods which are specifically mentioned in the definition by way of Chapter heading have to be treated as eligible capital goods. Otherwise also, we find that fact of use of capital goods for repair and maintenance of the machines has been the subject matter of various decision of Honble High Court and has been held to be an activity related to the manufacturing activity. Thus, entitling the assessee to avail the Cenvat credit. Reference can be made to following decisions:
1. Ambuja Cements Eastern Ltd. vs. CCE, Raipur 2010 (256) ELT 690 (Chhattisgarh)
2. Hindustan Zinc vs. Union of India 2008 (228) ELT 517 (Raj.)
3. CCE, Bangalore-I vs. Alfred Herbert (India) Ltd.
2010 (257) ELT 29 (Kar.)
6. Reference is made to the latest decision in the case of Nangganj Sihori Sugar Co.Ltd. vs. CCE, Lucknow vide order dated 435/2011-SM dt.14.7.11 wherein identical submissions made by both sides and the Tribunal observed as under:-
Learned DR, on the other hand, relied upon the judgement of Division Bench of the Tribunal in the case of Vikram Cement vs. CCE, Indore reported in [2009 (242) ELT 545 (Tri-Del)] and judgement of Apex Court in the case of Ramala Sahkari Chini Mills Ltd. vs. CCE, Meerut I reported in [2010 (260) ELT 321 (SC)].
I have considered the submissions made by both sides and perused the records. I find that orders of the adjudicating authority as well as from the submissions of the learned counsel that the issue involved in this case and the disputed fact is whether duty paid on welding electrodes are used in the factory of appellant for repair and maintenance of plant and machinery is eligible for Cenvat credit. I find that judgements cited by the learned Counsel of Honble High Courts of Chhattisgarh, Rajasthan and Karnataka are directly on the point, wherein it is held that Cenvat credit can be availed on welding electrodes which are used for maintenance of plant and machinery. These judgements are binding on me.
As regards the decision of the Division Bench cited by the learned DR in the case of Vikram Cement, since judgements of the High Court are of higher judicial fera, hence have more binding force. As regards the Ramala Sahkari Chini Mills (supra), I find that this matter is referred to the Larger Bench of the Honble Supreme Court , this would indicate that at this juncture the judgement of the Honble High Court as referred to hereinabove are binding on me and respectfully following the same, the impugned order is liable to be set aside. The impugned order is set aside.
7. In view of the foregoing discussion, we do not find any merits in the Revenues stand. The impugned order is accordingly set aside and appeal allowed with consequential relief.
(Dictated and Pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( Manmohan Singh ) Member(Technical)
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