Custom, Excise & Service Tax Tribunal
Cce, Delhi-Iii vs Enco Engineers Combino Pvt.Ltd on 22 August, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
SINGLE MEMBER BENCH
Court-I
Appeal No. E/57233/2013
[Arising out of the OIA No.42/SVS/GGN/13 dt.23.1.13 passed by the CCE(Appeals), Delhi-III)
Date of Hearing/Decision: 22.08.2016
For Approval & signature:
Honble Mr.Ashok Jindal, 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 would be released under Rule 27 of the 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 Department Authorities?
Yes
CCE, Delhi-III Appellant
Vs.
Enco Engineers Combino Pvt.Ltd. Respondent
Present for the Appellant: Shri G.M.Sharma, AR Present for the Respondent: Mis.Krati Somani, Advocate Coram: Honble Mr.Ashok Jindal, Member (Judicial) FINAL ORDER NO.: 61155/2016 PER: ASHOK JINDAL The Revenue is in appeal against the impugned order.
2. The facts of the case are that the show cause notice was issued to the respondent on the following grounds:
(a) The respondent has taken the cenvat credit on machines i.e. capital goods which has been cleared without payment of duty and no document has been produced at the time of audit
(b) The credit taken on inputs and input service used for manufacturing of job work goods
(c) The credit taken on capital goods which has been ultimately used for manufacturing final products. As these capital goods have been used captively for manufacturing of dutiable goods, they are not entitled for credit.
(d) The credit denied on security services received in the factory of the respondent.
3. Heard the parties and considered all the issues in details.
(a)The respondent has taken the cenvat credit on machines i.e. capital goods which has been cleared without payment of duty and no document has been produced at the time of audit
4. I find that the respondent has cleared these capital goods under Rule 4(5) (a) of Cenvat Credit Rules, 2004 and received back in the factory. The documentary evidence to that effect has been filed by the respondents on 28.10.2015 before the adjudicating authority and the same has not been considered but the same has been considered by the Commissioner (Appeals). Therefore, I do not find any infirmity in the impugned order to allow the credit on the capital goods to the respondents.
(b) The credit taken on inputs and input service used for manufacturing of job work goods
5. As the principal manufacturer is discharging duty liability on job work goods, in that circumstance, the respondent is entitled to take credit on inputs and input service. This issue has already been settled by the Tribunal vide Final Order No.A/51628/2015-SM dated 28.4.2015.
(c) The credit sought to be denied on capital goods i.e. moulds and dies which has been ultimately used for manufacturing dutiable products.
6. This issue has been settled by the Tribunal in the case of Bharat Forge Ltd. -2004 (165) ELT 339 (Tri.-Mum.) wherein this Tribunal has observed as under:
3.On hearing? both sides we find that the position stands clarified by the CBEC circular dated 3-4-2000 in which the Board has clarified that Cenvat credit should not be denied if the inputs are used in the intermediate of the final products even if the intermediate is exempt from payment of duty. Circular No. 665/56/2002-CX., dated 26-9-2002 is also relevant, which clarifies that Cenvat credit should not be denied on capital goods used in the manufacture of intermediate goods exempt from payment of duty which are used captively in the manufacture of finished goods chargeable to duty. In other words these circulars clarifies that even if the intermediate product is exempt from payment of duty, as long as the final products in which the intermediate products are captively consumed carry duty and cleared on payment of duty then Cenvat credit is admissible on the inputs, machinery, goods used in the manufacture of exempted products. Since these circulars cited supra cover the issue in dispute we hold that the appellants are eligible to the amount of credit in question and set aside the impugned order for recovery of Cenvat credit and imposition of penalty and allow the appeal.
7. Therefore, I find that the respondent has correctly taken the credit on capital goods which are used for manufacture of dutiable goods.
(d) The credit taken on security services received in the factory of the respondent.
8. The respondent has availed the credit on security services in the course of their business of manufacturing of dutiable goods, therefore, as per Rule (2(l) of Cenvat Credit Rules, 2004 as held by the Honble Bombay High Court in the case of Ultratech Cement- 2010 (20) STR 577 (Bom.). the respondent has credit correctly on security services.
9. In view of above, I do not find any infirmity in the impugned order and the same is upheld. The appeal filed by the Revenue deserves no merits and the same is dismissed.
(dictated and pronounced in the court) (ASHOK JINDAL) MEMBER (JUDICIAL) mk 1