Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs Cce, Meerut on 27 August, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II Excise Appeal No. 5656 of 2004 [Arising out of the Order-in-Appeal No. 213-CE/MRT-II/ 2004 dated 21/09/2004 passed by The Commissioner (Appeals), Customs & Central Excise, Meerut.] For Approval and signature : Honble Shri S.S. Kang, Vice President Honble Shri Rakesh Kumar, 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 would 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 : Department Authorities? M/s D.S.M. Sugar Appellant Versus CCE, Meerut Respondent
Appearance Shri Rajesh Kumar, Advocate for the appellant.
Shri V. Choudhary, Authorized Representative (DR) for the Respondent.
CORAM:Honble Shri S.S. Kang, Vice President Honble Sh. Rakesh Kumar, Member (Technical) DATE OF HEARING : 27/08/2008.
Order No. ________________ Dated : ,,,,,,,,,,,_____________ Per. S.S. Kang :-
Heard both sides. Appellant filed this appeal against the impugned order, whereby benefit of Modvat credit in respect of M.S. Angles, H.R. Coil, M.S. Plate, M.S. Round, M.S. Joist, HR Sheets, Plates and channels and articles of Rubber sheet, Asbestos fiber/yarn packing material was disallowed on the ground that the same are in the nature of raw material or components/parts of capital goods and there is no provision under Rule 57Q to grant credit on such raw material of components.
2. Contention of applicant is that during the relevant period, as per provisions of Rule 57D (2) of Central Excise Rules, the credit of specified duty is available in case any intermediate product has come into existence during the course of manufacture or inputs for capital goods as defined in Rule 57Q and such capital goods are not chargeable to duty of excise. The contention is also that the appellant are engaged in manufacture of sugar and molasses and their plant requires frequent repairs and the items, in question, are used for repair and maintenance of specified capital goods, therefore, are entitled for the credit. The appellant relied upon the decision of Honble Rajasthan High Court in the case of Union of India vs. Hindustan Zinc Ltd. reported in 2007 (214) E.L.T. 510 (Raj.).
3. Contention of revenue is that as per the provisions of Rule 57Q of Central Excise Rules, the credit is available in respect of the duty paid specified goods and also to components, spares and accessories of the specified goods. The onus is on the appellants to show that items, in question, are used as accessories or components of capital goods as the onus is not discharged hence, impugned order is rightly passed.
4. We find that Honble Rajasthan High Court in the case of Union of India vs. Hindustan Zinc Ltd. (Surpa) held that M.S. plates used for repair and maintenance of machinery are necessary for running of plant and up-keeping of machinery directly involved in the manufacturing of products and are entitled for credit. In the present case, the credit was denied on the ground that the items, in question, are in the nature of raw material of components/parts of the capital goods and there is no provision under Rule 57Q to grant credit on such raw material or components. We find, as per the definition of capital goods, the spares, accessories and components of the specified goods are also entitled for credits. In the present case, appellant have to show that items, in question, are used as components, spares and accessories of the specified goods. In these circumstances, we find the matter requires reconsideration. The impugned order is set aside and the matter is remanded back to the Adjudicating Authority to decide afresh after affording an opportunity to the appellant. The appellants are directed to produce evidence in this regard to the Adjudicating Authority. The appeal is disposed of by way of remand.
(Dictated and pronounced in open court) (S.S. Kang) Vice President (Rakesh Kumar) Member (Technical) PK