Custom, Excise & Service Tax Tribunal
Sangam India Ltd vs C.C.E. & S.T., Jaipur-Ii on 5 August, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT IV
Excise Appeal No.E/51571/2014-EX [SM]
[Arising out of Order-in-Appeal No.189 (OPD)CE/JPR-II/2013 dated 29.11.2013 passed by the Commissioner (Appeals-II), Customs, Central Excise, Jaipur].
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
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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?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
Sangam India Ltd. Appellant
Vs.
C.C.E. & S.T., Jaipur-II Respondent
Present for the Appellant : Shri Mayank Garg, Advocate
Present for the Respondent: Shri. R.K. Gupta, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing : 05/08/2015
Date of Pronouncement: 04/02/2016
FINAL ORDER NO. 53944/2015
PER: S.K. MOHANTY
The brief facts of the case are that the appellant is engaged in the manufacture of manmade yarn and cotton yarn, falling under Chapter 55 & 52 respectively of the first schedule to the Central Excise Act, 1985. During the disputed period, the appellant had availed Cenvat credit of Central Excise duty paid on TMT Bars used for base structure of foundation of machines and also on fabricated and galvanized structure of towers. The Central Excise department in the adjudication proceedings had disallowed the Cenvat credit taken on the disputed goods on the ground that the same are not confirming to the definition of capital goods defined in the Cenvat Credit Rules, 2004. In appeal, the ld. Commissioner (Appeals) has confirmed the adjudged demand. Hence, this present appeal before the Tribunal.
2. Shri Mayank Garg, the ld. Advocate appearing for the appellant submitted that fabricated and galvanized structures being used for supply of electricity to the main machines for manufacturing yarn, the same should be considered as component/accessory of the machines falling under clause (i) of the definition of capital goods contained in Rule 2(a)(A) of the Cenvat Credit Rules, 2004. To support his said stand, the ld. Advocate has relied on the decisions of this Tribunal in the case of Commissioner of Central Excise, Raipur - Vs. - Jindal Steel & Power Ltd., reported in 2011 (263) ELT 557 (Tri.-Del.). With regard to TMT Bars, the submissions of the ld. Advocate are that since the same are used for base structure of foundation for installation of machines, the same should be considered as capital goods for availment of Cenvat credit.
3. On the other hand, Shri R.K. Gupta, the ld. D.R. appearing for the respondent reiterated the findings recorded in the impugned order and further submitted that the disputed goods shall not be eligible for Cenvat credit in view of the decision of the Larger Bench of this Tribunal in the case of Vandana Global Ltd. - Vs. - Commissioner of Central Excise, Raipur, reported in 2010 (253) ELT 440 (Tri.-LB).
4. I have heard the ld. counsel for both sides and perused the records.
5. In the impugned order, the ld. Commissioner (Appeals) has held that towers are not components, spares or accessories of transformer or goods of Chapter 84 or 85, and thus, the credit taken on fabricated and galvanizing structures of Chapter 73 for towers meant for wheeling in and wheeling out of electricity between the factory and AVVNL is not admissible to the appellant. It is an admitted fact on record that the fabricated and galvanized structure falling under Chapter 73 of the Tariff Act, have been used for construction of towers, through which electricity has supplied to the main machines for manufacturing of the final product i.e. yarn. Since the disputed goods are used for construction of towers through which electricity is transmitted between the factory and AVVNL through the transformer, falling under Chapter 85 of the Central Excise Tariff Act, the disputed goods, in my opinion, should be considered as accessories of the capital goods for the purpose of taking of cenvat credit in terms of Rule 2 (a) (A) of the Cenvat Credit Rules, 2004. The issue as to whether the disputed goods should be considered as accessories of the capital goods, the same is no more res-integra in view of the decision of this Tribunal in the case of Commissioner of Central Excise, Raipur vs. Jindal Steel and Power Ltd. reported in 2011 (263) ELT 557 (Tri. Delhi), wherein the benefit of cenvat credit has been extended to the disputed goods holding that electrical items are indispensable for carrying out the process of providing stabilized electric power to the production machinery engaged in the manufacture of the final product within the factory; thus, the disputed goods by nature of their use and participation in the capital goods installed in the factory should be considered as accessories. In view of the said decision, the disputed goods qualify as accessories of machines falling under Chapter 85 of the Tariff Act. Thus, Central Excise paid on those goods will be eligible for cenvat credit.
6. With regard to TMT bars, I find from the impugned order that the same were used for base structure of foundation on which machines were installed and since the said disputed goods are used for support of capital goods, the cenvat credit has been denied by the Commissioner (Appeals). I do not find any infirmity in the impugned order, in view of the decision of Larger bench of this Tribunal in the case of Vandana Global Ltd. vs. Commissioner of Central Excise, Raipur reported in 2010 (253) E.L.T. 440 (Tri. L.B.), wherein it has been held that duty paid on structural items to support the capital goods will not qualify for availment of cenvat credit.
8. In view of the foregoing, the appeal filed by the appellant is partly allowed to the extent of cenvat credit taken on fabricated and galvanized structures. The appeal with regard to cenvat credit on TMT bars is dismissed. The appeal is disposed of in above terms.
[Pronounced in the Open Court on 04.02.2016] (S.K. MOHANTY) MEMBER (JUDICIAL) Anita ??
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