Custom, Excise & Service Tax Tribunal
A P L Apollo Tubes Ltd vs Noida on 5 September, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH : ALLAHABAD
E/55696/2014-EX[DB]
(Arising out of Order-in-Original No.28/COMMISSIONER/NOIDA/2014-15
dated 05.09.2014 passed by Commissioner, Customs, Central Excise &
Service Tax, NOida.)
M/s. APL Apollo Tubes Ltd.
...APPELLANT(S)
VERSUS
Commissioner of Customs, Central Excise & Service Tax, Noida
RESPONDENT (S)
APPEARANCE Shri Rajesh Chhibber (Advocate) for the Appellant (s) Shri Pawan Kumar Singh (Supdt.) (A.R.) for the Revenue CORAM:
MRS. ARCHANA WADHWA, HON'BLE MEMBER(JUDICIAL) SHRI ANIL G. SHAKKARWAR, HON'BLE MEMBER(TECHNICAL) DATE OF HEARING/DATE OF DECISION 05.09.2018 FINAL ORDER NO.72150/2018 Per Mrs.Archana Wadhwa :
After hearing both sides we note that the appellant is engaged in the manufacture of various types of pipes and tubes, hollow sections etc.. The said goods are being manufactured by the appellant after availing Cenvat Credit in respect of various inputs like GP Coils, HR Coil and Zinc etc..
2. The appellant's factory was visited by Central Excise officers on 16.05.2012 who conducted various checks and verifications. As a result the stock of inputs i.e. HR Coils, GP coils and Zinc was found short 2 E/55696/2014-EX[DB] involving duty of Rs.57,94,909.00. Revenue entertained a view that such short found stock was cleared by the appellant in a clandestine manner even though the appellant's authorized representative gave a reason for the same by deposing that such coils were issued for further slitting and such slitted coils were available in their factory, even though the stock was not debited from the raw material account. Similarly an explanation was offered for the Zinc by submitting that Zinc is being used in the tanks and it is only the quantity of actual consumption which was subsequently shown as having been used by reducing the same from their raw material account.
3. Further the visiting officers noticed that the appellants have availed credit on round plates, angles, channels, sheets, rods etc. to the tune of Rs.23,67,477.00 during the period of 15.07.2008 to 13.08.2008. A view was entertained that such iron and steel items cannot be considered to be Cenvatable in terms of Cenvat Credit Rules.
4. Further the visiting officers found that the appellant was availing Cenvat credit in respect of pipes, which were being cleared by them on payment of duty, without undertaking any manufacturing process. As such it was opined that inasmuch as no manufacturing process is being undertaken by the appellant, they are not entitled to Cenvat credit to the extent of Rs.2.21 Crores (appsox.).
5. On the basis of above, the appellants were issued with a show cause notice dated 08.11.2013 proposing to confirm the demands and to deny the credits in respect of three issues, as detailed above. The notice culminated into an order passed by Commissioner confirming the 3 E/55696/2014-EX[DB] demands, as proposed in the notice along with confirmation of interest and imposition of penalties. Hence the present appeal.
6. As regards the demand of duty to the extent of Rs.57.94 Lakhs, we note that the same is based upon the alleged shortage of stock of inputs, as detected by the visiting officers and on the finding that such short found stock stands cleared by the appellant without payment of duty.
Even though we find that the appellants have tendered a plausible explanation for such shortages, inasmuch as the visiting officers did not take into account the slitted coils and the Zinc available in the tanks, we are of the view that even if the shortages are accepted to be correct reflection of facts, the demand of duty cannot be sustained on that basis alone as held by the Hon'ble Allahabad High Court in the case of Commissioner of Central Excise, Kanpur v. Minakshi Castings [2011 (274) E.L.T. 180 (All.)] and Delhi Tribunal's decision in the case of Puran Sons Alloys P.Ltd. v. Commissioner of Central Excise, Jaipur [2013 (291) E.L.T. 65 (Tri.-Del.)].
7. As regards the Cenvat Credit of Rs.23,67,477.00, we find that apart from making a bald allegation that various iron and steel items are not Cenvatable, in terms of Cenvat Credit Rules, the Revenue has not examined the use of the same in the assessee's factory.
8. Ld.A.R. submits that as same were used as structures, the credit would not be available in terms of larger Bench's decision in the case of Vandana Global Ltd. v. CCE, Raipur [2010 (253) ELT 440 (Tri.-LB)]. 4
E/55696/2014-EX[DB] However, we find that even if the Revenue's stand that such goods were used as structurals is accepted, the credit would still be available to the appellant as the larger Bench decision in the case of Vandana Global Ltd. (supra) does not stand approved by the Hon'ble Gujarat High Court in the case of Mundara Ports and Special Economic Zone [2015 ELT 39 (Guj.)]. The issue is also covered in favour of the assessee by the Hon'ble Madras High Court in the case of India Cements Ltd. [2015 (321) ELT 209 (Mad.)]. As such we hold that the appellant is entitled to avail the said credit.
9. Major part of the demand to the extent of Rs.2,21,94,816/- stands confirmed against the appellant by denying them the Cenvat credit of duty paid on the pipes purchased by them from other manufacturers on the sole ground that no manufacturing activity has taken place in the appellant's factory and as such credit cannot be availed by them. We find that even the said issue is no more res integra and majority decision of the Tribunal in the case of Asian Colour Coated Ispat Ltd. v. CCE reported in 2015 (317) ELT 538 (Tri.-Del.) has held that even if no manufacturing as taken place, but the goods have been cleared finally on payment of duty, the assessee would be entitled to the Cenvat Credit of duty paid on the raw materials. To the same effect is the Hon'ble Bombay High Court's decision in the case of CCE v. Ajitya Enterprises reported in 2013 (294) ELT 203 (Bom.)]. As such we find no justification for upholding the said demand. The same is also set aside.
5
E/55696/2014-EX[DB]
10. In a nutshell the impugned order confirming the demands and imposing penalties is set aside and appeal is allowed with consequential relief, if any.
(Dictated and pronounced in the open Court.)
SD/ SD/
(ANIL G. SHAKKARWAR) (ARCHANA WADHWA)
MEMBER(TECHNICAL) MEMBER (JUDICIAL)
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