Custom, Excise & Service Tax Tribunal
M/S. Gupta Synthetics Limited vs Commissioner Of Central Excise & S.T., ... on 1 June, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : E/931/2011 (Arising out of OIA-SA/86/VAPI/2011 dated 27.06.2011, passed by Commissioner (Appeals) Central Excise, & S.T., Vapi ) M/s. Gupta Synthetics Limited : Appellant (s) VERSUS Commissioner of Central Excise & S.T., Vapi : Respondent (s)
Represented by :
For Appellant (s) : Shri P.P. Jadeja, Consultant For Respondent (s) : Shri K. Sivakumar, Authorised Representative For approval and signature :
Mr. P.K. Das, Honble Member (Judicial) 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.K. Das, Honble Member (Judicial) Date of Hearing / Decision : 01.06.2015 ORDER No. A/10742 / 2015 Dated 01.06.2015 Per : Mr. P.K. Das;
The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Articles of Textiles classifiable under Chapter 52,54 and 55 of the Central Excise Tariff Act, 1985. A show cause notice dated 09.4.2010 was issued proposing to deny CENVAT credit of Rs. 12,52,642/- alongwith interest and to impose penalty. It has been alleged that the appellants during the period from 2005-06 to 2007-08 wrongly availed the CENVAT credit on MS Channels, Angles, M.S. Bars, Beams etc., falling under Heading No. 72.14 and 72.16 of the Central Excise Tariff Act, 1985, which are not covered under the definition of capital goods as specified under Rule 2(a) of the Central Excise Rules, 2004. It has further been alleged that Chapter 72 has not been specified in Clause A(i) of Rule 2(a) of the said Rules. The adjudicating authority confirmed the demand of duty alongwith interest and imposed penalty of equal amount of duty. By the impugned order, the Commissioner (Appeals) upheld the adjudication order.
2. Learned Counsel on behalf of the appellant contested the demand of duty on merits as well as on limitation. It has been submitted that the appellant, in reply to show cause notice, categorically stated that these items were used as accessories namely, Winder Frame, Air Handling System, Cooling System, Dryer Structure for the plant and machinery, and is covered under Clause (iii) of Rule 2(a) of the said Rules. He further submits that findings of the lower authorities that these materials were used in building material without any evidence. It has further been submitted that the appellant disclosed the use of these items in their monthly ER-1 returns in detail. He submits that the entire demand is barred by limitation. He filed written submission alongwith case laws.
3. On the other hand, the learned Authorised Representative for the Revenue reiterates the findings of the Commissioner (Appeals). He categorically submits that these items were used as building material, as observed by the Commissioner (Appeals). It is also submitted that the appellant had not disclosed the use of these items in their Returns and the extended period of limitation would be invoked.
4. After hearing both the sides and on perusal of the records, I find that in reply to show cause notice, it is stated that these materials were used for fabrication of machines namely, Winder Frame, Air Handling System, Cooling System, Dryer Structure etc. It is contended that weight, size and nature of the machines was such that its fabrication/ fixing to structures was essential with nuts and bolts because the attachment is not permanent and what is attached can be easily detached It is categorically stated that these items were used to install the machines at their factory. The appellant claimed that these items are accessories used in the plants and machineries. In terms of Clause (iii) of Rule 2(a) of Cenvat Credit Rules, 2004, Capital goods covers components, spares, accessories used in the goods specified in Clause (i) and Clause (ii) irrespective of any heading. The Commissioner (Appeals) observed that the appellant had not submitted any document and he had proceeded on the basis that these items were used as building material. The department failed to produce any material that these items were used as building materials. But, the appellant had given detailed use of these items in fabrication of machines in reply to show cause notice, which was not disputed by the adjudicating authority.
5. Learned counsel strongly relied upon the decision of the Honble Madras High Court in the case of CCE & ST vs. India Cements Limited 2014 (310) ELT 636 (Mad). In that case, the assessee was engaged in the manufacture of Cement. The assessee availed cenvat credit on capital goods namely, M.S. Plates, Angles, Channels etc. for manufacturing new ESP for raw mill project, additional fly ash handling system, MND Crusher etc. The assessee used M.S. Plates, Angles, Channels, TMT Bars etc. for erection of new plant and machineries in their factory and treated the same as the components. The Honble High Court observed as under:-
8. From a perusal of the above said judgment, it is? seen that there is no change in the circumstance and this Court had already considered the issue and held that the decision reported in 2011-TIOL-73-SC-CX (Saraswati Sugar Mills v. Comissioner of Central Excise, Delhi-III) in Civil Appeal No. 5295 of 2003, dated 2-8-2011 is distinguishable on facts. This Court applied the principles laid down in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.) and held that the Tribunal was justified in allowing the assessees contention in respect of the very same assessee.
9. The present appeal is also in respect of the very? same assessee and therefore, we find no distinguishable fact or issue contrary to the earlier decision of this Court. The Tribunal has also found that the assessee has satisfied the user test in the present case. Hence, following the principles laid down in the decision reported in 2010 (255) E.L.T. 481 (Commissioner of Central Excise Jaipur v. Rajasthan Spinning & Weaving Mills Ltd.) and the earlier decision of this Court in C.M.A. No. 3101 of 2005, dated 13-12-2012, we are inclined to reject the appeal, thereby confirm the order of the Tribunal. Accordingly, this Civil Miscellaneous Appeal stands dismissed. No costs.
6. In my considered view, the above decision would apply n the present case. I also find force in the submissions of the learned Counsel for the appellant that the demand is barred by limitation. The appellant availed credit on these items and declared in their ER-1 returns. These items were used in various machineries. This fact was not refuted by the department. No material was available that the appellants suppressed the fact with intent to evade payment of duty.
7. In view of the above discussions, the impugned order can not be sustained on merits as well as on limitation. Accordingly, it is set-aside. The appeal filed by the appellant is allowed.
(Order dictated and pronounced in the Court) (P.K. Das) Member (Judicial) .KL 2