Custom, Excise & Service Tax Tribunal
Cce, Bhopal vs M/S Bharat Heavy Electrical Ltd on 9 July, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 9.7.2013
Excise Appeal No. 1176 of 2011-SM
[Arising out of Order-in-Appeal No. 38/BPL/2011 dated 23.2.2011 passed by the Commissioner, Central Excise, Bhopal)
For Approval & signature:
Honble Shri Sahab Singh, Member (Technical)
1.
Whether Press Reporter 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?
CCE, Bhopal Appellant
Vs.
M/s Bharat Heavy Electrical Ltd. Respondent
Appearance:
Shri R.K. Verma, D.R. - for the appellant
Shri Z.U. Alvi, Advocate - for the respondent
CORAM: Honble Shri Sahab Singh, Member (Technical)
Final Order No. 56972/2013 dated 9.7.2013
Per Sahab Singh :
This appeal is filed by Revenue against Order-in-Appeal No. 38/BPL/2011 dated 23.2.2011 passed by the Commissioner of Central Excise (Appeals), Bhopal.
2. The brief facts of the case are that M/s BHEL (respondent) are manufacture of electrical goods falling under Chapter 84 & 85 of the Central Excise Tariff. They had availed credit of Rs.7,07,041/- on the hydraulic jack, ammonia paper and parts of locomotive. According to the department, Modvat credit availed was not admissible to the respondent. A Show Cause Notice dated 12.9.1996 was issued to the respondent for disallowance of Modvat credit under Rule 57I of the Central Excise Rules and also proposing penalty under Rule 173Q of the Central Excise Rules. The said Show Cause Notice was decided vide Order-in-Original dated 18.8.1998 wherein the adjudicating authority has denied the credit amounting to Rs.6,98,805/-. A penalty of Rs.6,98,805/- was also imposed on the respondent. The respondent challenged the order before the Commissioner of Central Excise (Appeals) who vide order dated 22.3.2002 rejected the appeal for the non-compliance of the provisions of Section 35F of the Act. The respondent filed a Misc. application which was again rejected by Commissioner (Appeals) vide his order dated 21.12.2009. The respondent filed an appeal before the Tribunal and Tribunal vide order dated 7.1.2011 remanded the matter to the Commissioner (Appeals) to hear the appeal on merits. The Commissioner (Appeals) vide his impugned order dated 23.2.2011 had allowed the appeal filed by the Respondent. Revenue has challenged the impugned order in the present appeal.
3. Ld. D.R. appearing for Revenue submitted that the Commissioner (Appeals) has granted the relief to the respondent relying on the Larger Bench decision of the Tribunal in the case of Bajaj Auto Limited Vs. CCE 1996 (88) ELT 355 (Tri.-LB). He submits that this Tribunal in the case of Daewoo Motors India Ltd. Vs. CCE 2001 (135) ELT 596 (Tri.-Del.) has taken a different view and distinguished the decision of the Larger Bench in Bajaj Auto Ltd. He also submits that Patna High Court in Tata Engineering & Locomotive Co. Ltd. Vs. Union of India 1994 (72) ELT 525 (Pat) has also held that tool kits supplied by assessee with motor vehicle chassis manufactured by them on the request of customers are not inputs used in or in relation to manufacture of final product. He therefore submits that the Commissioner (Appeals) has wrongly allowed the credit and granted relief to the respondent in respect of hydraulic jack.
4. Ld. Consultant for the appellant submitted that total credit of Rs.6,98,805/- was disallowed. Out of total credit disallowed Rs.11,594/- pertains to hydraulic jack and the balance amount is in respect of credit availed in respect of parts of locomotive. He submits that credit in respect of part of locomotive has not been challenged by Revenue in the present appeal. Moreover, the Commissioner (Appeals) in earlier proceedings has allowed the Cenvat credit in respect of part of the locomotives. He points out that the present appeal disputes the credit eligibility in respect of hydraulic jack only. He further submits that hydraulic jack is an essential part in respect of transformers and is to be treated as an input. He submits that in case of Tata Engineering & Locomotive Ltd. tool kits were not essential part and were being supplied on the request of the buyer. Therefore Patna High Court decision is not applicable in the present case. Therefore Revenues appeal is without any merit.
5. After hearing both the sides, I find that the issue relates to availability of Cenvat credit in respect of hydraulic jack which is an item supplied with power transformers. It is used for lifting of the transformer tank, in order to move it on rails for changing oil in the event of short circuit fault. It is necessarily supplied against each order for transformer. I find that the Commissioner (Appeals) relied upon the Larger Bench decision in the case of Bajaj Auto Ltd. wherein the Tribunal has held that assessee is entitled to avail the Modvat credit, in respect of excise duty paid on kits. In Daewoo Motors India Ltd. this Tribunal was considering whether the value of tool kits is to be incorporated in the assessable value of the motor vehicle. I find that decision in Bajaj Auto Ltd. is passed by Larger Bench of three members, I am of the view that decision of Bajaj Auto Ltd. has rightly been relied upon by the Commissioner of Central Excise (Appeals) and I do not find any infirmity in the order in appeal passed by the Commissioner of Central Excise (Appeals). Accordingly, I uphold the same and reject the Revenues appeal.
(Dictated & pronounced in open Court) (Sahab Singh) Member (Technical) RM 1