Custom, Excise & Service Tax Tribunal
M/S Sri Chakra Cements Ltd vs Cce, Guntur on 26 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/22000/2015 (Arising out of Order-in-Appeal No. GUN-EXCUS-000-APP-071-15-16 dt. 29.07.2015 passed by CC, CE & ST (Vizag Appeal-II), Guntur) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Sri Chakra Cements Ltd., ..Appellant(s) Vs. CCE, Guntur ..Respondent(s)
Appearance Sh. R. Muralidhar, Advocate for the Appellant.
Sh. Arun Kumar, Deputy Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 26.09.2016 Date of Decision: 26.09.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are the manufacturers of ordinary Portland cement and clinker. It was noticed by the department that appellants availed CENVAT credit on Wear Resistant Plates, Impact Liner Plates, Cooler Sidewall Plates, Blow Bar Chains, LS Crush Hammers which were used by the appellant for repairs and maintenance of capital goods. Department considered such plates in the nature of MS Plates, Angles, Sheets, Joists, Coils etc., and entertained the view that credit is not admissible. The appellant was issued show cause notice demanding duty of Rs. 3,12,021/- along with interest and for imposition of penalty. After due process of law the adjudicating authority confirmed the demand, interest and penalty. In appeal the Commissioner (Appeals) upheld the same. The appellants are thus before the Tribunal.
2. On behalf of the appellant Ld. Counsel Sh. R. Muralidhar submitted that the question whether the subjects items used for repair and maintenance of capital goods is eligible for credit is settled by the various decisions of Tribunal and High Court. He relied upon the following decisions. In Union of India Vs Hindustan Zinc Ltd., [2007 (214) ELT 510 (Raj)] it was held as under:
3. This Court? concluded that goods once brought in factory for use in up-keep and maintenance of plant and machinery, which are directly used in manufacture of excisable articles, are the capital goods, and were certainly of subordinate necessity to such plant and machinery for the running of plant and is otherwise essential for its smooth and regular operations. Without proper up-keep and maintenance, the principal plant and machinery cannot function properly. Use of such capital goods is essential for smooth running of plant with greater efficiency. In other words, the goods in question are essential supplement to the plant and machinery for use in manufacturing goods, for its greater efficiency and better results and thus, it is an integral part of the process with which the primary machines are engaged. Looked from these aspects, there is no impediment for the goods in question qualifying as capital goods eligible for Modvat credit.
3. The Honble High Court of Karnataka in the case of CCE, Bangalore-I Vs Alfred Herbert (India) Ltd., [2010 (257) ELT 29 (Karnataka)] following the ratio laid in the case of Hindustan Zinc Ltd., has held the issue in favour of assessee holding that the credit availed on subject items used for repairs and maintenance of the machinery is eligible for credit. It is also submitted by the Ld. Counsel for appellant that relying upon the said judgment of the Honble High Court of Karnataka the Commissioner (Appeals) has dropped the proceedings of appellant in respect of demand raised in subsequent year vide Order-in-Appeal No. GUN-EXCUS-000-APP-219-15-16 dated 15.03.2016. In view thereof, following the judgment laid in the above cases as well as taking note of the dropping of proceedings in the subsequent year in the appellants own case I find that the impugned order is unsustainable. The same is set aside. Appeal is allowed with consequential reliefs, if any.
(Pronounced & dictated in open court) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) Jaya.
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