Custom, Excise & Service Tax Tribunal
Acc Ltd vs Commissioner Of Central Excise, Nagpur on 16 April, 2008
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. II Appeal No. E/1697/07 (Arising out Order-in-Appeal No. SVS/313/NGP-C/2007 dated 18.9.2007 passed by the Commissioner of Central Excise (Appeals), Nagpur) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) ====================================================
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 Lordships wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
ACC Ltd.
Appellant Vs. Commissioner of Central Excise, Nagpur Respondent Appearance:
Shri R. Krishnan, Advocate for the appellant Shri S.N. Prasad, SDR for the respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of hearing : 16.4.2008 Date of decision : 16.4.2008 O R D E R No:..
Per: Mr.M.V. Ravindran, Member (Judicial) This appeal is filed against Order-in-Appeal No. SVS/313/NGP-C/2007 dated 18.9.2007
2. Considered the submission made by both sides and perused the records. The issue involved in this case that during the period from October 2005 to March 2006 the appellant had availed cenvat credit amounting to Rs. 2,81,565/- on the welding electrodes which was utilised for repair/maintenance of capital goods. Both the lower authorities have held that appellants are not liable to cenvat credit of duty paid on such electrodes.
3. Learned counsel on behalf of the appellant submits that the issue involved in this case is decided by the Division Bench of the Tribunal in favour of the assessee in case of Bhushan Steel & Strips as reported in 2008 (223) ELT 517 and also brings to my notice the decision of the Tribunal in Ruchi Health Foods Ltd. as reported 2007 (218) ELT 716. It is his submission that welding electrodes are used in the repairing of the capital goods without which production of finished goods cannot take place. On the other hand, learned SDR submits that the issue in respect of credit of duty paid on electrodes is squarely covered by the decision of the larger bench in the case of Triveni Engineering as reported in 2005 (186) ELT 158 (Tri) in the case of Jaypee Rewa Plant reported in 2003 (159) ELT 553.
4. I find that the larger bench of the Tribunal in the case of Triveni Engineering (supra) and Jaypee Rewa (supra) had categorically held that cenvat credit of the duty paid on the welding electrodes cannot be permitted to the assessee as a capital good or as an input. On the basis of the two larger bench decisions, I am unable to accept the proposition made by the counsel that the division bench decision in Bhushan Steel and Ruchi Health Foods (supra) is applicable in this case.
5. Accordingly, to my mind, the impugned order to the extent it upholds the order in original in denying the credit to the appellant on the welding electrodes is correct and does not require interference. As regards penalty, since the issue regarding eligibility to credit of duty paid on welding electrodes, had to be settled by the larger bench decisions, the availment of the credit by the appellant cannot be faulted with and hence to my mind penalty imposed on the appellant is unwarranted.
6. As such, the impugned order to the extent it confirms the demand of duty is upheld and to the extent of upholding of penalty is concerned, is set aside.
7. Appeal disposed of accordingly.
(Dictated in Court) M.V. Ravindran Member (Judicial) sr