Custom, Excise & Service Tax Tribunal
Godrej Industries Limited vs Commissioner Central Goods And Service ... on 14 September, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH, MUMBAI
Excise Appeal No. 87054 of 2019
(Arising out of Order-in-Appeal No. PVNS/463/APPEALS THANE/TR/2018-19/833
dated 01.04.2019 passed by the Commissioner of GST & Central Excise (Appeals),
Thane, Mumbai.)
M/s Godrej Industries Ltd. ........Appellant
Plot No. N-73, Anandnagar,
Additional MIDC, Ambernath (East),
Dist.-Thane, Mumbai
VERSUS
Commissioner of CGST, Thane Rural ........Respondent
th Utpad Shulk Bhavan, 4 Floor, Bandra-Kurla Complex, Bandra East, Mumbai - 400 051 APPERANCE:
Shri Rajesh Ostwal, Advocate for the Appellant Shri Amrendra Kumar Jha, Dy. Commissioner, Authorised Representative for the Respondent CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) FINAL ORDER NO. A/86076 / 2022 Date of Hearing: 14.09.2022 Date of Decision: 14.09.2022 Denial of CENVAT Credit to the Appellant on certain inputs on the ground that they are neither capital goods nor it's components, spares and accessories and it confirmation by the Commissioner (Appeals) vide above noted order is assailed in this appeal.
E/87054/2019 2
2. Facts of the case, in brief, is that Appellant is a manufacturer of various chemicals who has been availing CENVAT Credits in respect of inputs, capital goods and input services in relation to manufacture of its final products. Vide show-cause notice dated 29.05.2017 credits on certain items were proposed to be treated as inadmissible and accordingly demand of Rs.33,07,820/- was made and upon adjudication, Rs.21,46,570/- demand was confirmed by the Assistant Commissioner of CGST, Division-V, Thane Rural in his detailed order dated 06.04.2018 alongwith interest and equal penalty against which Appellant preferred an appeal before the Commissioner (Appeals) and being unsuccessful therein it has approached this Tribunal challenging the legality of said order of rejection of its appeal by the Commissioner (Appeals).
3. During the course of hearing of this appeal, learned Counsel for the Appellant Mr. Rajesh Ostwal submitted that denial of credits to the Appellant was primarily on the items being used in the manufacturing process namely FRP Grating, Joist, Ladder & Platform and Angle Channel, Pallet Racking System & Metal Furniture, M S Cable Tray, Pipe & Handling Equipment, Hot Dip Galvanized Ladder Tray / Cable Tray, Led Flame Glass which all qualify for availment of credits both as accessories of capital goods and as products used in the manufacturing process. Placing reliance on the judgment of the Hon'ble Supreme Court in the case of Mehra Bros. Vs. JC - [1991 (51) ELT 173 (SC)], Pragati Silicones Pvt. Ltd. Vs. CCE - [2007 (211) ELT 534 (SC)], CCE Vs. Insulation Electrical (P) Ltd. - [2008 (224) E/87054/2019 3 ELT 512 (SC)], he further submitted that accessories are supplementary and subordinating nature which are not required to be essential for actual functioning of the product, which fact is well explained in CBEC Circular No. 276/110/96-TRU dated 02.12.1996 wherein it was clarified that all parts, components, accessories, which are to be used with capital goods and classifiable under any Chapter Heading are eligible for availment of CENVAT Credits. Further, in placing reliance on the judgments of Hindustan Petroleum Vs. CGST - [2018 (11) TMI 723 - CESTAT Chennai], Minda Sai Limited Vs. CCE - [2019 (5) TMI 1245 - CESTAT New Delhi], Kirloskar Oil Engines Ltd. Vs. CCE - [2018 (5) TMI 966 - CESTAT Mumbai], Kohler India Corporation Pvt. Ltd. Vs. [CCE - 2018 (2) TMI 614 - T], Galaxy Surfactants Ltd. Vs. CCE - [2017 (12) TMI 1149- CESTAT Mumbai], Gestamp Sungwoo Automotive (Chennai) P. Ltd. Vs. CCE - [2018 (363) ELT 1191 (T)], Sree Ramicides Chemicals P. Ltd. Vs. CCE - [2014 (311) ELT 102 (T)], Dalmia Cement (Bharat) Ltd. Vs. CCE - [2015 (330) TMI 645 (T)], he argued that both Pallet Racking System & Metal Furniture i.e. heavy duty rack were held to be inputs and credits were allowed thereof. Likewise in the case of Hindustan Petroleum Corporation Ltd. Vs. CCE - [2018 (1) TMI 221- CESTAT], Hindustan Zinc Limited Vs. Commissioner of CGST - [2020 (4) TMI 273- CESTAT], ITC Ltd. Vs. CC - [2016 (11) TMI 932 - CESTAT Hyderabad], Bharat Oman Refineries Ltd. Vs. CGST - [2018
-TIOL-1256 -CESTAT Del], Divi's Laboratories Ltd. Vs. CCE - [2006 (196) ELT 285 (T)], Shree Cement Ltd. Vs. CCE - [2016 (332) ELT 759 (T)], Indian Aluminium Co. Ltd. Vs. CCE - [2010 (252) ELT 92 E/87054/2019 4 (T)], MS Cable Tray/Hot Dip Galvanized Ladder Tray/Cable Tray were declared as qualified inputs and in the case of Godrej Industries Ltd. Vs. CCE - Final Order dated 28.08.2017 in appeal No. E/10652/2017 and Suryadev Alloys & Power Pvt. Ltd. Vs. CGST - [2019 (1) TMI 1029-CESTAT], Nayara Energy Limited Vs. CCE & ST - [2020 (2) TMI 749 - CESTAT], CCE Vs. Shree Gurudatta Sugar Ltd. - [2007 (213) ELT 305 (T)]. Pipe & Handling Equipment as well as FRP Grating were accepted as valid credits respectively for the purpose of availment of CENVAT Credits. Moreover, in placing reliance on the decision of Larger Bench of this Tribunal in the case of Banco Products (India) Ltd. Vs. CCE - [2009 (235) ELT 636 (T-LB)], Singhal Enterprises Pvt. Ltd. Vs. CCE - [2016 (9) TMI-CESTAT], learned Counsel submitted that LED Flame Glass is also considered to be accessories of capital goods since it is fixed to the Plant & Machinery to observe the manufacturing process taking place in the machinery. His alternate argument is that the entire demand is beyond the normal period of limitation and in view of regular filing of monthly ER-I return by them before the Department which was well aware of such availment of credits, extended period cannot be invoked, for which also the order passed by the Commissioner (Appeals) is not sustainable in law and facts.
4. In response to such submissions learned Authorised Representative for the Respondent-Department Mr. Amrendra Kumar Jha argued in favour of reasoning and rationality of the order passed by the Commissioner (Appeals) and had drawn attention of this E/87054/2019 5 Bench to para 8(iii) of the order passed by the Commissioner (Appeals) wherein he had mentioned about the ground of rejection of credit benefits to the Appellant on Pallet Racking Systems/Metal Furniture of Steel and LED Flame Glass as they are falling under Chapter 94 and Chapter 94 respectively on the ground that no evidence was submitted by the Appellant to prove that the same were used for storing raw material/finished goods as claimed by the Appellant and not used in the office nor LED Glass Flame could be established to be capital goods or its components, spares or accessories. In respect of other items he fairly conceded that judicial decisions have covered those as inputs credits. Learned Authorised Representative further submitted that Appellant had reversed credit on Joist, Ladder & Platform and Angle Channel alongwith interest for which, it should not have sought for allowing credits on those items at the appellate stage and the judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Jawahar Mills Ltd. reported in 2001 (132) ELT 3 (S.C.) relates to electrical wires and not to LED Flame Glass for which reasoned order passed by the Commissioner (Appeals) is not be interfered with except on those items in which judicial precedent had settled the issue.
5. Having regard to the submissions made by both the sides and upon perusal of the relied upon case laws what is required to be considered here is whether on Pallet Racking System/Metal Furniture and LED Flame Glass, credit can be extended since for rest of items, this Tribunal would be bounded by the judicial precedent set by itself, E/87054/2019 6 apart from the fact that on Joist, Ladder & Platform and Angle Channel Appellant had accepted the stand taken by the Respondent- Department and reversed the credit with interest before April, 2018 and not pressed for this issue. On these 3 items Appellant had submitted related case laws like the judgment of Hon'ble Supreme Court passed in Jawahar Mills Ltd. (supra) that deals with electrical wires with a request to accept/treat LED Flame Glass in the similar footing. It has also cited judgments on Pallet Racking System & Metal Furniture etc., as narrated above, and explained that item named as metal furniture were basically heavy duty racks on which products were being stored and a physical visit to the Appellant company would have clarified the doubt raised by the learned Commissioner (Appeals) in his order under para 8(iii) that no evidence was produced to proof that those were not used in the office but used in the production process. Learned Counsel for the Appellant further submitted that Bulb (LED Flame Glass) itself is covered under Chapter 85 and the same used as a part or accessories of vessel or machine to manufacture final product and the same vessel as a machine is itself a machine covered under Chapter 84 that is included under capital goods. Be that as it may, it is not understood as to why the clarificatory Circular of the CBEC bearing No. 276/110/96-TRU dated 02.12.1996 that includes all parts, accessories and components used with the capital goods and covered under any Chapter Heading is eligible for availment of CENVAT Credit is not considered by the learned Commissioner (Appeals) that would have covered these 3 items also. Therefore, E/87054/2019 7 having regard to the precedent set by this Tribunal and in order to maintain consistency and predictability of the order to be passed by the Tribunal and with due regard to the clarification issue vide above noted Circular No. 276/110/96, the following order is passed.
THE ORDER
6. The appeal is allowed and the order passed by the Commissioner of GST & Central Excise (Appeals), Thane, Mumbai vide Order-in-Appeal No. PVNS/463/APPEALS THANE/TR/2018- 19/833 dated 01.04.2019 is hereby set aside. Appellant is entitled to the CENVAT Credit taken by it to the tune of Rs.21,46,570/- that has been refused in Order-in-Original and confirmed in Order-in- Appeal minus the amount of Rs.1,12,357/- which has been reversed upon acceptance of its liability.
(Operative portion of the order pronounced in Court) (Dr. Suvendu Kumar Pati) Member (Judicial) Prasad