Custom, Excise & Service Tax Tribunal
Hindustan Petroleum Corporation ... vs Commissioner Of Gst&Amp;Cce(Chennai ... on 3 October, 2018
1
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.: E/40233/2018
(Arising out of Order-in-Appeal No. 273/2017 (CTA-I) dated
30.10.2017 passed by the Commissioner of G.S.T. & Central Excise
(Appeals-I), Chennai)
Hindustan Petroleum Corporation Ltd., Chennai : Appellant
Vs.
Commissioner of G.S.T. & Central Excise, : Respondent
Chennai North Commissionerate Appearance:-
Shri. Sai Prashanth, Advocate for the Appellant Shri. B. Balamurugan, AC (AR) for the Respondent CORAM:
Hon'ble Shri P Dinesha, Member (Judicial) Date of Hearing/Decision:17.09.2018 Date of Pronouncement:03.10.2018 Final Order No. 42575 / 2018 The assessee-appellant is a Government of India Undertaking, engaged in the business of refining of petroleum crude and marketing various petroleum products thereof. The appellant has availed CENVAT Credit on various inputs and capital goods including ‚Selective Pallet Racking System‛, falling under sub- heading 73089090 which was used for storing the raw materials and 2 finished goods in the appellant's store room. A Show Cause Notice No. 02/2016 dated 15.02.2016 was issued by the Revenue wherein it proposed to deny the CENVAT Credit availed on these Pallet Racking System on the ground that the same could not be classified as 'capital goods' within the meaning of Rule 2 of the CENVAT Credit Rules, 2004. The adjudicating authority, however, after considering the explanation of the appellant, vide Order-in-Original dated 14.10.2016 confirmed the proposals in the Show Cause Notice; and on appeal before the lower appellate authority, the appellant having not met with success, has filed this appeal before this forum.
2. Heard Shri. Sai Prashanth, Ld. Advocate appearing for the assessee-appellant and Shri. B. Balamurugan, Ld. Department Representative (DR) appearing for the Revenue.
3. During the course of hearing, Ld. Advocate pointed out that the issue stands covered by the decisions of this very Bench of the Tribunal in the cases of : -
M/s. Gestamp Sungwoo Automotive (Chennai) Pvt. Ltd. Vs. C.C.E., Chennai- IV - 2018 (4) T.M.I. 1227 - CESTAT Chennai; M/s. Ashok Leyland John Deere Construction Equipment Co. Pvt. Ltd. Vs. C.C.E., Chennai-I - 2018 (2) T.M.I. 458 - CESTAT Chennai; and M/s. Sree Ramicides Chemicals Pvt. Ltd. Vs. C.C.E. (Service Tax), Tiruchirapalli - 2013 (10) T.M.I. 229 - CESTAT Chennai; 3 apart from the decisions of various other Benches of the Tribunal, including the judgement of Larger Bench of the Tribunal in the case of Banco Products (India) Ltd. Vs. Commissioner of C. Ex. Vadodara-I reported in 2009 (235) E.L.T. 636 (Tri. - LB).
4. Per contra, Ld. DR supported the findings of the lower authorities and further submitted that the decisions relied upon by the Ld. Advocate are not applicable since in many cases the decision of the Larger Bench in Banco Products (India) Ltd. (supra) is followed; the issue involved in Banco Products (India) Ltd. (supra) was the admissibility of CENVAT Credit on plastic crates, which were movable as against a stationed Pallet Racking System. 5.1 I have considered the rival contentions, perused the documents placed on record and have gone through the decisions relied on by the Ld. Advocate. In one of the decisions in the case of M/s. Gestamp Sungwoo Automotive (Chennai) Pvt. Ltd. (supra), the Division Bench of the Chennai Tribunal has addressed the issue with regard to the eligibility of credit on pallets, storage racks, etc. After considering the rival contentions, this Bench has ruled as under :
"6. We have perused the photographs and examined the actual usage of various items credit on which was denied by the original authority. We are satisfied that the pallets and storage racks are essential items for safekeeping and further use of raw materials, components and semi-finished goods or finished 4 goods before they are either processed or cleared out of factory. These can be considered as essential items involved in the manufacturing process. In this connection, we also refer to the decision of the Larger Bench of the Tribunal in the case of Banco Products (India) Ltd. Vs. Commissioner of Central Excise, Vadodara - 2009 (235) ELT 636 (Tri. LB). There the Tribunal dealing with plastic crates used for material handling inside the factory allowed the credit on the same."
5.2 Similarly, in the case of M/s. Ashok Leyland John Deere Construction Equipment Co. Pvt. Ltd. (supra), the Revenue had denied the credit on the storage racks holding that they are neither capital goods nor inputs and after considering various decisions, this Bench had allowed the appeals with consequential reliefs. I also find that in the case of M/s. Sree Ramicides Chemicals Pvt. Ltd.(supra) a similar view was expressed by this Bench.
6. The Revenue has not been able to furnish any contrary decision nor was it able to deny the fact that the racks involved were used for storing raw materials and finished goods in the store room and that Pallet Storage Racks were essential items for safekeeping of the raw materials or the finished products.
7. Going therefore by the ratio decidendi of the above decisions, I set aside the impugned order and allow the appeal with consequential benefits, if any.
(Pronounced in open court on 03.10.2018)
(P Dinesha)
Sdd Member (Judicial)