Custom, Excise & Service Tax Tribunal
Acc Ltd vs Commissioner Of Central Excise on 19 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Appeal No. E/652, 653/12 (Arising out of Orders-in-Appeal No. YDB/1/LTU/MUM/2012 and YDB/2/LTU/MUM/2012 both dated 27.01.2012 passed by Commissioner of Central Excise & Service Tax (Appeals), Mumbai) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) ================================================
1. Whether Press Reporters may be allowed to see : No 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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
ACC Ltd.
Appellant Vs. Commissioner of Central Excise Mumbai Respondent Appearance:
Shri Prasad Paranjape, Advocate for appellant Shri Ashutosh Nath, Asst. Commr (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing: 19.09.2016 Date of Decision: 19.09.2016 ORDER NO Per: M.V. Ravindran These two appeals are directed against orders-in-appeal No. YDB/1/LTU/MUM/2012 and YDB/2/LTU/MUM/2012 both dated 27.01.2012.
2. Heard both sides and perused the records.
3. The issue involved in this case is whether the appellant is eligible to avail CENVAT credit of service tax paid on services like erection, commissioning and installation and the capital goods used for the wind mills which are situated far away from the factory. The period involved in this case is June 2008 to July 08 and January 2009 to Feb 09. It is the case of the Revenue that CENVAT credit availed by the appellant on the input service and the components and spares of the capital goods is incorrectly availed as wind mills are far away from the factory premises, the said services and components & spares are not used in or in relation to the manufacture of final products.
4. The learned Counsel would submit that the issue is settled by the decision of the Tribunal in the case of Maharashtra Seamless Ltd. 2012 (276) STR 117 (Tri. Delhi) and Endurance Technologies P. Ltd. 2011 (273) ELT 248 (Tri. Mum) which has been upheld by the Hon'ble High Court of Bombay as reported at 2015-TIOL-1371-HC-MUM-ST. It is also the submission of the learned Counsel that the same issue was referred to the Larger Bench of this Tribunal and the Larger Bench in the case of Parry Engg. & Electronics P. Ltd. 2015 (40) STR 243 (Tri. LB) by relying upon the judgement of the Hon'ble High Court of Bombay in the case of Endurance Technology Pvt. Ltd. (supra) the issue is held in favour of the assessee.
4.1 As regards the CENVAT credit on the capital goods, he relied upon the decision of the Tribunal in the case of Aluminum Powder Co. Ltd. 2016 (42) STR 776 (Tri. Chennai) and the judgement of the Hon'ble High Court of Rajasthan in the case of Hindustan Zinc Ltd. 2009 (240) ELT A114 (Raj) which reversed the decision of the Tribunal in the case of Hindalco Industries Ltd. as reported in 2004 (313) ELT 311 (Tri. Del.).
5. Learned D.R. would submit that the wind mills are not capital goods and the appellant is not eligible for the input service tax credit availed on such services and for proposition he relied upon the Hon'ble High Court of Bombay in the case of Vodafone India Ltd. 2015 (324) ELT 434 (Bom.).
5.1 It is also his submission that the allegation in the show-cause notice is regarding utilization of components and spares are for output services are not taxable.
6. On careful consideration of the submissions made by both sides, I find that the lower authorities have erred in denying CENVAT credit to the appellant on the services received for erection, commissioning and installation and components & spares which were used for wind mills. There is no dispute that the said electricity generated by the windmills is fed to the Grid of State Electricity Board. Appellant got equivalent quantity of electricity from Grid after minor adjustment as per the terms and conditions entered between the appellant and the Electricity Board. I find that the issue is no more res integra after the judgement of the Hon'ble High Court of Bombay in the case of Endurance Technology Pvt. Ltd. (supra) and as also the Larger Bench decision of the Tribunal in the case of Parry Engg. & Electronics P. Ltd. (supra).
6.1 As regards the CENVAT credit on the capital goods viz. components and spare parts used for the wind mills, the Tribunals decision in the case of Aluminum Powder Co. Ltd. (supra) is directly on the point and in favour of appellant.
6.2 As regards the submissions made by learned D.R. by relying upon the judgement of the Hon'ble High Court of Bombay in the case of Vodafone India Ltd. (supra), I find that the judgement of Hon'ble High Court of Bombay in the case of Commissioner of Central Excise v. Endurance Technology Pvt. Ltd. (supra) is directly on the point of availment of CENVAT credit on the wind mills, hence the case directly on the issue is being considered by me for disposing of the appeals.
6.3 In my view that the appellant had made out a case on merits, more so, when the judgement of the Hon'ble High Court of Bombay covers the issue in their favour.
7. In view of the foregoing, impugned orders are set aside and the appeals are allowed with consequential relief, if any. (Dictated in Court) (M.V. Ravindran) Member (Judicial) nsk 1 5 Appeal No. E/652, 653/12