Custom, Excise & Service Tax Tribunal
M/S. Vandana Global Ltd vs C.C.E., Raipur on 14 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066. Date of Hearing: 23.08.2016 Date of Pronouncement: 14.10.2016 Appeal No.E/54460/2015-EX[SM] [Arising out of Order-in-Appeal No.BHO-EXCUS-002-APP-160-15-16, dated 07.08.2015 passed by C.C.E.(Appeals), Raipur] M/s. Vandana Global Ltd. Appellant Vs. C.C.E., Raipur Respondent
Appearance Ms. Priyanka Goel, Advocate - For Appellant Mr. Dharam Singh, DR - For Respondent CORAM: Honble Mr. A.K. Arya, Member (Technical) Final Order No.54077/2016, dated 14.10.2016 Per Mr. Ashok K Arya :
Both the sides have been heard in detail.
2. The matter concerns with Cenvat credit on structural steel items, namely, Plates used in fabrication/laying foundation of supporting structures of the plant and machineries
3. The appellant represented by the ld. advocate, Ms. Priyanka Goel, inter alia submits as follows:-
(i) The item is covered under definition of capital goods under Rule 2(a) and 2(k) of the Cenvat Credit Rules, 2004.
(ii) Commissioner (Appeals) in the impugned order has not found that the MS plates had not been used by the appellant for construction of factory shed, building or laying of foundation or making of structures for support of capital goods.
(iii) The Commissioner (Appeals) observed that the appellant has claimed to have used the MS plates for repair and maintenance of chimney of Dusting system of RMP Hopper, Coal circuit, Kiln at Sponge Iron Division and Boiler Duct at Power Plant and upheld the order of lower authority denying the Cenvat credit of Rs.1,01,396/- on the ground that the appellant failed to produce the relevant supporting documents. In this behalf, the ld. Commissioner (Appeals) has failed to appreciate that for mere repairing of machinery or equipment no drawing, designing or employment of skilled is necessarily required, hence his findings in para 6 and 7 of the impugned order are liable to be set aside.
(iv) MS plates of various thickness had been purchased for maintenance of kiln, RMP and iron ore crusher.
(v) Reliance is placed on CESTAT judgement in the case of Monnet Ispat & Energy Ltd. Vs. CCE, Raipur [2015 (330) ELT 711 (Tri.-Del.)] and on Hon'ble Supreme Courts decision in Jaiprakash Industries Vs. CCE, Chandigarh [2002 (146) ELT 481 (SC)]
4. Revenue represented by Shri Dharam Singh, ld. Departmental Representative, reiterates the findings given by the lower authorities.
5. I have carefully considered the facts on record, submissions of both sides and the case laws cited. For the present issue, the relevant provisions of Cenvat Credit Rule 2(k) which define inputs i.e. to Rule 2(k) of Cenvat Credit Rules, 2004 along with Explanations are given below:-
2(k) input means
(i) All goods, except light diesel oil, high speed oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oil, greases, cutting oils, coolants, accessories of the final products cleared along with the final products, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose used in the factory of production;
(ii) All goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output services;
Explanation 1. The light diesel oil, high speed diesel oil or Motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever.
Explanation 2. Inputs include goods used in the manufacture of capital goods, which are further used in the factory of the manufacturer; 5.1 Further, Rule 2(a) of Cenvat Credit Rules defining capital goods is given below:-
Rule 2(a) Capital goods means:-
(A) The following goods, namely :-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof; and
(vii) storage tank, used-
(1) in the factory of the manufacturer of the final products, but does not include any equipment or (2) for providing output service;
5.2 In this case, the period involved for the demand is from August, 2009 to June, 2010. I find that that with effect from 07.07.2009, Explanation 2 to Rule 2(k) defining input excludes cement, angles, channels, CTD bars, TMT bars and other items used for construction of factory shed or laying of foundation or making of structures for support of capital goods from the definition of input. Here, there is no evidence on record to prove that the item steel plates have been used for construction of factory sheds or for laying foundation for support of capital goods, etc. Actually, the appellant has claimed that the subject goods, namely, MS plates have been used for repair and maintenance of chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. It is also evident from the facts that there is no evidence to disclaim or counter the appellants claim that these goods were used for repair and maintenance of above machinery, namely, chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. Therefore, subject item is certainly covered within the Explanation 2 of definition of input given in Rule 2(k) of Cenvat Credit Rules, 2004 . As an evidence for the use of the items, e-mail dated 11.09.2012 certifying the use of subject item for the maintenance of kiln, RMP, etc. is on record.
5.3 Considering the facts on record, submissions of both sides and the decisions of Hon'ble Supreme Court in the case of CCE, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. 2010 (255) ELT 481 (SC) and CESTAT judgement in the case of Monnet Ispat & Energy Ltd. Vs. CCE, Raipur [2015 (330) ELT 711 (Tri.-Del.)] it is held that the subject item is entitled to the Cenvat credit.
6. In the light of the above findings, the appeal is allowed with consequential relief to the appellant.
[Pronounced in the Open Court on 14.10.2016] (Ashok K. Arya) Member (Technical) SSK -6-