Custom, Excise & Service Tax Tribunal
Cce, Trichy vs M/S. G.B. Engineering Enterprises Pvt. ... on 17 August, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI E/434/2010 & E/CO/58/2010 (Arising out of Order-in-Appeal No. 93/2004 dated 10.12.2004, passed by the Commissioner of Customs & Central Excise (Appeals), Trichy). CCE, Trichy : Appellant Vs. M/s. G.B. Engineering Enterprises Pvt. Ltd. : Respondent
Appearance Shri B. Balamurugan, AC(AR) For the applicant Shri M.N. Bharathi, Adv., For the respondent CORAM Honble Shri R. PERIASAMI, Technical Member FINAL ORDER No. 40994 / 2015 Date of Hearing/Decision: 17.08.2015 Per: R. Periasami Revenue filed appeal against the Order-in-Original. The adjudicating authority in his order demanded ineligible cenvat credit of Rs. 6,87,612/- availed by the respondents on the capital goods under Rule 14 of CCR and imposed equal penalty under Rule 15(2) of CCR. On appeal by the respondents, the Commissioner (Appeals) in his order allowed the respondents appeal by relying on the Supreme Court decision in the case of M/s. Vikram Cements Vs. CCE reported in 2006 (197) ELT 145(SC). The Revenue reviewed the said OIA and filed the present appeal.
2. The Ld. AR reiterated the grounds of appeal G where the credit was wrongly availed credit on the capital goods not installed in the appellants premises. Capital goods were located in the other premises and there was no intimation and no permission taken from the department for removal of capital goods to the other two units. M/s. Vikram Cements Honble Supreme Courts decision relied by LAA is not applicable to the facts of the present case as the units were integrated and they were not registered. He relied on Eagle Flask Industries Ltd. Vs. CCE 2004 (171) ELT 296 (SC).
3. On the other hand, the Ld. Advocate appearing on behalf of the respondent reiterated the findings of the Commissioner (Appeals) and submitted that the Commissioner (Appeals) has rightly allowed their appeal as the capital goods were used in the manufacture of the final products of the respondents main unit. Thecapital goods were installed in the adjacent premises, which is 500 mts. away from the main unit and both were not registered under central excise and carried out only job work for the main unit and appropriate excise duty was rightly discharged by the respondent unit. There is no violation. He relied on Pooja Forge Ltd. Vs. CCE, Faridabad 2006 (196) ELT 18 (Tri.-Del.) and CCE, Coimbatore Vs. Habasit Iakoka (P) Ltd. 2014 (306) ELT 455 (Mad.).
4. I have carefully considered the submissions by both the sides and perused the records. The short issued involved in this case is availment of Cenvat credit on capital goods which were installed outside the premises of the main unit of the respondent. I find that the Lower Authority has relied on the Supreme Courts decision in the case of M/s. Vikram Cements. There is no dispute on the fact that the respondents were discharged the central excise duty on the finished goods which were cleared by the main unit. The impugned order clearly brought out the fact that both the units were carrying out the job work and no finished goods were cleared from the unregistered units. The Honble High Court in the case of Habasit Iakoka Pvt. Ltd. (supra) on identical issue allowed cenvat credit on the capital goods installed in unregistered premises and used in the manufacture of the final product. The relevant portion of the order is reproduced as under:-
5.?Learned counsel for the respondent brought to our notice, the decision of the Tribunal reported in 2006 (196) E.L.T. 18 = 2007 (8) S.T.R. 318 (Tribunal) Pooja Forge Ltd. v. Commissioner of Central Excise, Faridabad, wherein the Tribunal, in the circumstances, has taken a similar view in tune with the views of the order of the Tribunal impugned in this appeal.
6.?Going by the above finding of the Tribunal, we are also convinced that there was no violation of Rule 57Q(1) of the Central Excise Rules. Rule 57Q(1) reads as under :
(1)?The provisions of this section shall apply to goods (hereafter in this section, referred to as the final products) described in Column (3) of the table given below and to the goods (hereafter, in this section referred to as capital goods), described in the corresponding entry in column (2) of the said Table, used in the factory of the manufacturer of final products.
7.?There is no dispute that the capital goods involved hereunder is one of the capital goods falling within the schedule to the Central Excise Tariff Act and used for the manufacture of the final products. Therefore, the only other question to be examined is whether the respondent has satisfactorily established the condition namely that the said capital goods were used in the factory for the manufacture of final products. The salient points noted in the report establishes beyond doubt that except the fact that the capital goods were used in the respondents own premises situated just 500 mts away from the place of manufacture and that after carrying out necessary connected processes in that premises which is called as Mother Roll Plant, the same is brought to the place of manufacture where the final products is rolled out. Therefore, the activity of the respondent in the usage of the capital goods can be said to be part of its manufacturing activities of final product in its registered factory. It is also not the case of the appellant that by usage of the capital goods in the Mother Roll Plant, the same was in any way alienated to any one, other than the respondent factory.
8.?The salient points noted in the report of the Commissioner established beyond doubt that the capital goods were used in the factory of the respondent for the purpose of manufacture of final products. When the above said conclusion was inevitable, as held by the Tribunal, the respondent was entitled to avail Modvat credit duty paid on the capital goods concerned. Consequently, the order of the Tribunal cannot be faulted. The question of law is therefore, answered in the negative and the appeal stands dismissed. No costs. Consequently, connected C.M.P. No. 10540 of 2005 is closed.
The ratio of the above decision squarely applicable to the present case as the capital goods were installed in the adjacent unregistered premises and used for job work of main unit and finished goods were cleared from the respondents main unit on payment of duty. By respectfully following the decision of the Honble High Court above, I do not find any infirmity in the order of the Commissioner (Appeals) in allowing the credit on the capital goods. Accordingly, the impugned order upheld and the Revenues appeal is rejected. Cross-objection is disposed of.
(Order dictated and pronounced in the open Court) (R. PERIASAMI) TECHNICAL MEMBER BB 1