Custom, Excise & Service Tax Tribunal
Akzo Nobel India Ltd vs Ludhiana on 26 June, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. 2
Excise Appeal No. 60396 of 2023
[Arising out of Order-in-Appeal No. CHD-EXCUS-001-LDH-APPL-75/22-23 dated
22.03.2023 passed by the Commissioner (Appeals), Central Goods and Service
Tax, CR Building, Sector 17-C, Chandigarh]
M/s Akzo Nobel India Ltd ......Appellant
A-42, Industrial Estate, Phase VIII B
SAS Nagar, Punjab 160071
VERSUS
Commissioner of Central Excise and ......Respondent
Service Tax, Ludhiana Central Excise House, Ludhiana Punjab 141001 APPEARANCE:
Shri Ajay Jain, Advocate for the Appellant Shri Narinder Singh, Authorized Representative for the Respondent CORAM: HON'BLE MR. ASHOK JINDAL, MEMBER (JUDICIAL) FINAL ORDER NO. 60748/2025 DATE OF HEARING: 26.06.2025 DATE OF DECISION:26.06.2025 ASHOK JINDAL:
The appellant is in appeal against the impugned order wherein demand has been raised against the appellant on account of utilization of Education Cess and Secondary & Higher Education CESS of payment of excise duty during the period March, 2015 onwards by issuance of the show cause notice dated 01.04.2022. A demand was also raised by denying the Cenvat credit availed on the
2 E/60396/2023 goods namely, Sanitary ware and LED Portable Lamp set to say that these are neither capital goods nor inputs. Therefore, the appellant is not entitled to take Cenvat credit. Therefore, the appellant is appeal before me.
2. The learned Counsel appearing on behalf of the appellant submitted that he is not contesting the issue on merits only he is contesting is that whole of the demand is barred by limitation as they have availed Cenvat credit pertaining to Education Cess and Secondary & Higher Education CESS for payment of excise duty in March, 2015 onwards till June, 2016 and they have shown the utilization of the said for payment of duty in their regular returns of excise. In that circumstances, show cause notice issued on 01.04.2022 is barred by limitation. With regard to denial of Cenvat credit on Sanitary ware LED Portable Lamp Set, he has given the usage of said items as under :
i) Sanitary ware (construction unit of eye face foundation), is an item/ machine which is fixed in the manufacturing plant and used for the purpose of cleaning of body and eyes if any splash/ spill happen during manufacturing process. This is basically safety equipment essentially required for a chemical plant. This is required for the safety of the workers working in the plant in the absence of which no worker will work in the plant. It is emphasized that in the chemical industry, the safety of a industrial worker is must and compulsorily required under Labor Laws. Workers health and safety is prescribed statutorily under labor laws. In view thereof, this item is essentially required during the course of manufacture of final product without which the manufacture is not possible.
ii) LED Portable Lamp set, is an equipment/ Flame Proof Torch which is used for checking the material inside the Paint mixer and vessels.
3 E/60396/2023 This is essential to manufacture the final product. The same is used for checking the material inside the paint mixer. During the manufacture of paint various checks and process/quality of the material is required to know the accuracy/ other chemical requirements of the product. The same is used during the manufacture of final product-paint and without the use of this item, the final product cannot be completed/ manufactured.
3. On the other hand, learned authorized representative submitted that Revenue is not able to find out from their regular returns, the utilization of Education Cess and Secondary & Higher Education CESS for payment of duty during the impugned period. These facts have been suppressed by the appellant, therefore extended period of limitation is rightly invoked.
4. Further, he submitted that the item sanitary ware and LED Portable Lamp Set are items for construction and which are excluded from the definition of capital goods or inputs, therefore, they are not entitled to take Cenvat credit.
5. Heard the parties and considered the submissions.
6. On going through the records placed before me, I find that in this case two issue emerges
(a) whether the extended period of limitation is invocable in the facts and circumstances of the case where they have shown in their ER-1 returns utilization of Education Cess and Secondary & Higher Education Cess for payment of excise duty in the impugned 4 E/60396/2023 period and show cause notice has been issued by invoking the extended period of limitation is barred by limitation or not ?
(b) whether the appellant is entitled to avail Cenvat credit on Sanitary ware LED Portable Lamp Set as capital goods or not?
Issue (a) Whether the extended period of limitation is invocable in the facts and circumstances of the case where they have shown in their ER-1 returns utilization of Education Cess and Secondary & Higher Education Cess for payment of excise duty in the impugned period and show cause notice has been issued by invoking the extended period of limitation is barred by limitation or not ?
7. I find that in ER-1 return appellant has clearly mentioned utilization of Education Cess and Secondary & Higher Education Cess for payment of excise duty during the impugned period, therefore, the show cause notice issued to the appellant by invoking the extended period of limitation on 01.04.2020 is barred by limitation. The same view was taken by this Tribunal in the case of M/s Tafe Ltd. Vs. Commissioner of GST & C.Ex., Chennai, 2022 (381) ELT 266 (Tri.-Chennai) wherein, in this Tribunal held that in such cases the extended period of limitation is not invocable. Therefore, I hold that the appellant succeeds on limitation, therefore no demand is sustainable on account of utilization of Education Cess and Secondary & Higher Education Cess for payment of excise duty during the impugned period.
5 E/60396/2023 Issue (b) Whether the appellant is entitled to take Cenvat credit on Sanitary ware and LED Portable Lamp Set as capital goods or not?
8. The appellant has been able to show the usage of the said items as explained in Para (2) hereinabove which has been used an equipment for manufacturing of their final product and usage of that items has not been denied by the Revenue. In that circumstances, I hold that the appellant entitled to take Cenvat credit on Sanitary Ware and LED Portable Lamp Set as capital goods. Therefore, the appellant has correctly availed the Cenvat credit on these items, accordingly, Cenvat credit is allowed.
9. In view of the above discussion, I hold that the impugned order is not sustainable in the eyes of law. Accordingly, the same is set aside.
10. In result, the appeal is allowed with consequential relief, if any.
(Dictated and pronounced in the open court) (ASHOK JINDAL) MEMBER (JUDICIAL) Kailash