Custom, Excise & Service Tax Tribunal
M/S India Cements Limited vs Cce, Guntur on 18 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/21945/2015 (Arising out of Order-in-Appeal No. VIZ-EXCUS-003-APP-018-15-1dt. 04.06.2015 passed by CC, CE & ST, Guntur) For approval and signature: Honble Madhu Mohan Damodhar, Member (Technical) 1. 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? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s India Cements Limited ..Appellant(s) Vs. CCE, Guntur ..Respondent(s)
Appearance Sh. G. Prahlad, Advocate for the Appellant.
Sh. Guna Ranjan, Superintendent (AR) for the Respondent.
Coram:
Honble Madhu Mohan Damodhar, Member (Technical) Date of Hearing: 18.07.2016 Date of Decision: 18.07.2016 FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar] The Appellants herein are manufacturers of Cement and Clinker failing under Chapter Sub Heading 2523 29 10 (OPC), 2523 29 30(PPC) and 2523 1000 respectively of the Central Excise Tariff Act, 1985. The Appellants are registered with the Central Excise Department with Registration Certificate No. AAACT1728PXM003. The Appellants avail CENVAT Credit under the CENVAT Credit Rules, 2004. The Appellants avail CENVAT credit of inputs and inputs services used in the production of cement. The cement manufactured is cleared on payment of appropriate duty. During the relevant period, the Appellants availed CENVAT Credit on the following items;
i) MS Flats
ii) MS Channels
iii) MS Plates
iv) Sheets
2. Show Cause Notice was issued alleging that the MS Flats, MS Sheets, MS Bolt and MS Plate Chequered used by the Appellants in the manufacturing unit could not be considered as capital goods as defined under Rule 2(a) of the CENVAT Credit Rules, 2004 as the said steel items on which credit has been availed by the Appellants are structural steel items falling under Chapter 72 and 73 of the Schedule to the Central Excise Tariff Act, 1985 and are not among the goods listed at Rule 2(a)(A)(i) of the CENVAT Credit Rules, 2004 and are also not covered under Rule 2(a)(A)(iii) and that the items cannot be considered as components or accessories of specified capital goods.
3. The present appeal is filed by the appellant against the impugned Order-in-Appeal No. VIZ-EXCUS-003-APP-018-15-16 dated 04.06.2015 passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals-II), Vizag upholding the Order-in-Original No. 05/2013-C.Ex. dated 11.03.2013 which has confirmed the following:
i) Demand of CENVAT credit of Rs. 1,83,557/- under Rule14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944;
ii) Demand of interest of the amount at (i) under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944;
iii) Imposition of penalty of Rs. 18,500/- imposed under Rule 15(1) of the CENVAT Credit Rules, 2004;
The impugned Order-in-Appeal has been passed on the ground that the MS Flats, MS Sheets. MS Bolt and MS Plate Chequered used by the Appellants in the manufacturing unit could not be considered as capital goods as defined under Rule 2(a) of the CENVAT Credit Rules, 2004 and that the Chartered Engineers Certificate produced by the Appellant cannot be considered as the same was not produced before the Original Authority. Relying on the decision of Sree Rayalaseema Hi-Strength Hypo Ltd. V. CCE, Tirupati reported at [2012 (278) ELT 167] the Order-in-Appeal further holds that the goods used for repair and maintenance of plant and machinery are not eligible for CENVAT Credit.
4. Appellants represented by Learned Advocate Sh. G. Prahlad submitted that the matter is covered by High Court/Tribunal judgments and in particular by the order of this very Bench in the case of Orient Cement Ltd Vs CC, CCE & ST [2016-TIOL-1639-CESTAT-HYD].
5. The department, represented by Learned AR Sh. Guna Ranjan vehemently opposed the appeal. He pointed out that MS chequered plates are used for laying platforms, hence they have to be treated as part of civil works and not eligible to CENVAT credit. However, he fairly conceded that neither in the Show Cause Notice nor in the adjudication or appellate order is there any discussion of such usage of MS chequered plates and its ineligibility on that ground.
6. On the other hand, it is seen that the discussions in SCN and in the adjudication or appellate order are concerned with MS plates, however there is no analysis or discussion on eligibility or otherwise of MS chequered plates.
7. In any case, it is seen that the eligibility of credit on MS Plates, Sheets, Bolts is no longer res integra and has been settled in favour by a plethora of judgments, including that of CCE & C, Visakhapatnam Vs Rastriya Ispat Nigam Ltd., [2011 (271) ELT 338 (AP)] where the Honble High Court interalia held that credit on steel sheets used in repair and maintaincence of capital goods is eligible for credit. Even this very Bench, in the case of CCE & ST, Visakhapatnam Vs HPCL (Final Order No. A/30302/2016 dated 28/03/2016) and also in the case of Orient Cements Vs CCE & ST, Hyderabad-I (Final Order No. A/30528/2016 dated 10/06/2016) has also echoed this view and held that credit of duty on MS items (HR plates/sheets) used for repair and maintainence is admissible. Following the ratio laid down in the aforesaid judgments, the appeal is allowed in toto, with consequential benefits, if any, as per law.
(Operative part of this order was pronounced in court on conclusion of the hearing) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) Jaya.
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