Custom, Excise & Service Tax Tribunal
M/S. Imperial Granites P. Ltd vs Cce, Guntur on 23 April, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court I
Date of Hearing:10/03/2010
Date of decision:..
Appeal No.E/104/08
(Arising out of Order-in-Appeal No.81/2007(T)(D)CE
dt. 24/10/2007 passed by Commissioner(Appeals), Guntur)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Imperial Granites P. Ltd.
..Appellant(s)
Vs.
CCE, Guntur
Respondent(s)
Appearance Ms. Mona, Advocate for the appellant.
Ms. Joy Kumari Chander, Jt.CDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against the Arising out of Order-in-Appeal No.81/2007(T)(D)CE dt. 24/10/2007.
2. The relevant facts that arise for consideration are that the appellant herein is a 100% EOU. The appellant submitted a refund claim of Rs.89,164/- being duty paid on High Speed Diesel Oil (HSD oil) used for generation of power for manufacture of granite tiles for export. The said refund application was scrutinized by the Asst. Commissioner, Tirupati Division and granted a refund of Rs.71,298/- and disallowed refund of Rs.17,866/-. Aggrieved by such an order of allowing refund of Rs.71,298/-, Revenue filed an appeal before the ld. Commissioner(Appeals). Ld. Commissioner(Appeals), after considering the submissions made by both sides and also considering the memorandum of cross-objection filed by the assessee, set aside the Order-in-Original which granted the refund. Aggrieved by such an order, the appellant is before the Tribunal.
3. Ld. Counsel appearing on behalf of the appellant submits that the eligibility to cenvat credit on HSD oil is not in dispute. It is her submission that the HSD oil on which cenvate credit was availed was utilized by the appellant company for the manufacturing of goods for export and the said credit could not be utilized by them either for discharge of duty for the goods cleared to DTA or for any other purpose. Hence, they filed refund claim. She would draw our attention to the definition of inputs as provided in Rule 2(k) of the Cenvat Credit Rules, 2004 and submit that the credit can be granted on the goods used as fuel. It is her submission that there is no dispute that the goods were used as fuel and within their factory of production. She would draw my attention to CBEC circular No.799/32/2004-CX dt. 23/9/2004 and No.637/28/2002-CX dt. 8/5/2002. She would also draw my attention to the decisions of this Tribunal in the following cases for the proposition that the credit of duty paid on the inputs which are availed by an EOU if un-utilizable, refund has to be sanctioned.
a. U.K.Paints (India) Pvt. Ltd. Vs. CCE, Delhi-I [2004(170) ELT 280(Tri. Del.)] b. Motherson Sumi Electric Wires [Final Order No.371/2002 dt. 20/3/2007] c. CCE, Bangalore Vs. Motherson Sumi Electric Wires [2009(239) ELT 250(Kar.)] d. CCE, Kanpur Vs. Jagmini Micro Knit Pvt. Ltd. [2009(238) ELT 327(Tri. Del.)] e. CST, Delhi Vs. Convergys India Pvt. Ltd. [2009(16) STR 198(Tri. Del.)] She would also submit that the decision of the Tribunal in the case of Motherson Sumi Electric Wires has been upheld by the Honble High Court of Karnataka in respect of LDO used in generator sets will cover the issue in their favour.
4. Ld. Jt. CDR on the other hand would submit that the definition of inputs under the Cenvat Credit Rules, 2004 is very clear. It is her submission that the said definition categorically excludes HSD oil from the definition. She reiterates the findings of the ld. Commissioner(Appeals).
5. I have considered the submissions made at length by both sides and perused the records.
6. The issue involved in this case is whether the appellant is eligible for the refund of the duty paid, availed as credit, on HSD oil used for the manufacturing of granite tiles in an EOU.
7. From the perusal of the records, I find that it is not dispute that the appellant had taken cenvat credit of the duty paid on HSD oil procured from BPCL. It is also undisputed that the said diesel oil has been used by the appellant within their factory of production.
8. To come to a conclusion whether the appellant is eligible to refund of the amount paid on HSD oil, it is necessary to produce the definition of inputs as envisaged in Rule 2(k) of the Cenvat Credit Rules, 2004, which is under:-
2(k)?input means -
(i) all goods, except light diesel oil, high speed diesel 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 oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, 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, within 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 service;
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. - Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer (Emphasis supplied)
9. On perusal of the records, it is seen that the period involved in this case is from 1/11/2004 to 21/10/2005, during the period the above reproduced definition was in force. On plain reading of the definition, it is seen that the definition excludes Light Diesel Oil and HSD oil or motor spirit, commonly known as petrol from the category of input. I do also find merits in the proposition of the ld. Counsel that inputs which are used as a fuel, credit can be allowed. Though this proposition seems to be correct, it could be incorrect in respect of credit of the central excise duty paid on the HSD oil inasmuch as Explanation-1 to the said definition clearly reads for exclusion of HSD oil as being not treated as an input for any purpose whatsoever. This would indicate that LDO, HSD and petrol cannot be treated as an input even used as a fuel. This being the case, I do not find any merits in the appeal filed by the assessee.
10. As regards the decision relied upon by the ld. Counsel, I find that in all those cases, the issue was different and the facts were different. The decision of the Honble High Court of Karnataka in the case of Motherson Sumi Electric Wires (supra) is on different facts and circumstances of the case. The facts in the case before me has enumerated herein above clearly indicate the credit of the duty paid on HSD oil is excluded by the definition itself and hence it may not be considered as an input even as a fuel.
11. Accordingly, I find that the impugned order is correct, legal and does not suffer from any infirmity. The appeal filed by the assessee is rejected.
(Pronounced in court on.) (M.V.Ravindran) Member (Judicial) Nr 6