Custom, Excise & Service Tax Tribunal
Itc Ltd vs Hyderabad-Iii on 21 August, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH
Central Excise Appeal No. 2759 of 2012
(Arising out of Order-in-Appeal No.54/2012(H-III)CE dated 06.07.2012 passed by
Commissioner of Customs & Central Excise & Service Tax (Appeals-I & III) Hyderabad)
ITC Ltd ...Appellant
Paperboards & Specialty Papers Division,
P.B.No.4,
Sarapaka (Village)
Bhadrachalam,
Khammam Distt
Andhra Pradesh - 507128
Verses
Commissioner of Customs Central Excise ...Respondent
& Service Tax Hyderabad-III Kendriya Shulk Bhavan, LB Stadium Road, Basheerbag, Hyderabad-500004 AND Central Excise Appeal No. 27347 of 2013 (Arising out of Order-in-Original No. HYD-EXCUS-003-COM-009-13-14 Dated 31.03.2013 passed by Commissioner of Customs & Central Excise & Service Tax , Hyderabad-III) ITC Ltd ...Appellant Paperboards & Specialty Papers Division, P.B.No.4, Sarapaka (Village) Bhadrachalam, Khammam Distt Andhra Pradesh - 507128 Verses Commissioner of Customs Central Excise ...Respondent & Service Tax Hyderabad-III Kendriya Shulk Bhavan, LB Stadium Road, Basheerbag, Hyderabad-500004 APPEARANCE:
Mr Narender Dave Adv. for the appellant Mr V.R. Pavan Kumar, A.R. for the Respondent CORAM:
HON'BLE MR ANIL CHOUDHARY MEMBER(JUDICIAL) HON'BLE MR A.K. JYOTISHI, MEMBER(TECHNICAL) FINAL ORDER NOs. _30379-30390/2023 2 Date of Hearing: 21.08.2023 PER ANIL CHOUDHARY The issue involved in these appeals is whether the appellant Assessee have rightly taken CENVAT credit on HR plates, Base plates, MS channels, MS plates, Angles, etc.
2. The brief facts are that the appellant is engaged in the manufacture of paper and paperboards. Having their manufacturing facility in Khammam district, Telangana, Appellant has undertaken expansion of their manufacturing capacity. for such purpose, they purchased various items for fabrication and erection of plant and machinery. The various items manufactured interalia include kilns, boilers, gas plant, coal handling plant, chipper, fiber line, filter apparatus, cable trays, cooling tower, storage tank etc. Periodical show cause notices were issued for denial of CENVAT credit for the period December 2009 to August 2015. The present dispute in these two appeals relates to the period December 2009 to August 2010 and August 2011 to March 2012.
Particulars E/2759/2012 E/27347/2013
SCN No & Date V/48/15/14/2007-Adjn dated 101/2012-HYD-III Adjn
03.12.2010 dated 07.09.2012
OIO No & Date 03/2012-CE dated 01.03.2012 09/2013-CE-HYD-III-
Adjn(Commr) dated
31.03.2013
OIA No & date 54/2012(H-III)CE dated NA
06.07.2012
Period of December 2009 to August August 2011 to March
dispute 2010 2012
Amount Amount of Rs 98,035/- along Amount of Rs 87,25,265/-
involved with penalty of Rs 5000/- and along with equivalent
interest penalty and interest
3. The showcase notices were adjudicated. On contest the proposed demands were confirmed by way of disallowance of CENVAT credit. For the 3 period December 2009 to August 2010, appellant have preferred appeal before Commissioner (Appeals) and on being unsuccessful there, are in appeal before the Tribunal. In Appeal No. 27347/2013 as the adjudication order was passed by the Commissioner, the appellant is in appeal before this Tribunal. The details are evident from the following chart:
4. Assailing the impugned order, learned counsel for the appellant urges that the issue is no longer resintegra. Similar issues have been considered by this Tribunal earlier also in the appellant's own case with respect to similar disallowance of CENVAT credit wherein this Tribunal has allowed the appeal in favour of the appellant assessee, the details of which are as follows:
Period Amount (In Rs.) Appeal No. Final Order No. September 2010 1,71,68,062 E/25474/2013 Entire demand set to July 2011 along with aside vide interest and A/31139/2016 dated Rs.1,70,00,000 08.11.2016 (enclosed penalty herewith) April 2012 to 16,90,732 along E/20390/2014 Entire demand set November 2012 with interest and aside vide equivalent A/30873/2016 dated penalty 19.09.2016 (enclosed herewith) December 2012 17,89,019 along 07/2016 (H- Set aside vide Order- to October 2013 with interest and III) CE In-Appeal No. HYD-
Rs.10,000 as EXCUS-003-APP-
penalty 43,44 and 45-16-17
November 2013 12,34,941 along 08/2016 (H- Dated 23.01.2017 to October 2014 with interest and III) CE Rs.10,000 as penalty November 2014 20,96,333 along 55/2016 (H-
to August 2015 with interest and III) CE Rs.2,00,000 as penalty
5. Learned Council also mentions that they have not taken credit to the tune of Rs 74,58,589/- in respect of iron and steel items used in the civil structures. Further, they also reversed CENVAT credit to the tune of Rs 4 1,85,135/- in respect of civil items and items not used in the factory and used in fabrication of supporting equipment. Accordingly, the learned counsel prays for allowing the appeal with consequential benefits.
6. Learned AR for the Revenue relied on the impugned order.
7. In both the appeals the denial of credit either as inputs or as capital goods is the crux of the issue. While in impugned Order-in-Appeal, the Commissioner (Appeals) has not denied the fact that credit was admissible if the said structural steel items were used in the fabrication of any capital goods/parts/accessories/components and used in the factory, but he doubted the veracity of Chartered Engineer's certificate and therefore did not consider that evidence acceptable and held that in Order-in-Original, the credit is denied correctly due to non-acceptance of Chartered Engineer's Certificate, in view of lack of other evidence to prove that they were used in fabrication of capital goods
8. Having considered the rival contentions, we are satisfied that the issue is no longer resintegra as the same has been decided in favour of the appellant by this Tribunal in the aforementioned precedent orders, particularly order of the Coordinate Bench wide Final Order No. A/31139/2016 dated 8th November 2016 for the period September 2010 to July 2011 which was reported at 2017-TIOL-635-CESTAT-Hyd wherein this Tribunal has held as follows:
"5. Heard both sides. On perusal of the records as well as the Chartered Engineer certificate, we find that the subject items are used for fabrication of tubes, pipes and fittings, storage tanks, accessories of boiler, accessories of paper machines, cable trays, pulp mill etc. The appellant has also used subject items for fabrication of supporting for equipment & machinery. Ld. Counsel has explained that these platforms are not civil structures and they are of such nature that they can be dismantled, transported and re-assembled at any other site. The same issue was considered by the Tribunal (SM) in the Final Order No. A/30873/2016 dated 19.09.2016 wherein the Tribunal has allowed the credit of such items used for fabrication of operating and maintenance of 5 platforms. In the said case the Tribunal had allowed the credit on subject items used for fabrication of components/spares/accessories of the capital goods as explained in the Chartered Engineer certificate produced by the appellant. We are also able to see that the appellant has reversed the credit of Rs. 1,75,793/- which was availed by them in respect of MS items used for civil construction and items used outside the factory. In view of the above discussions, we hold that the appellant is eligible to the tune of Rs. 1,69,92,269/- (Rs. 1,71,68,062/- less Rs. 1,75,793/-).
6. For the above reasons, we find that the imposition of penalty is also not sustainable and the same is set aside. The appeal is allowed to the extent of allowing the credit to the tune of Rs. 1,69,92,269/- and also setting aside the penalty imposed. Appeal allowed on above terms. Miscellaneous application for Early Hearing by department is also disposed accordingly."
9. It is thus clear that Coordinate Bench, in their own case, has accepted the veracity of Chartered Engineer's Certificate to come to conclusion that such items were used for fabrication of components/spares/accessories of capital goods and not for civil construction.
10. Following the precedent order of the Tribunal, we set aside the impugned orders and allow these appeals. Appellant is entitled for consequential benefits in accordance with law.
(order pronounced and dictated in the open Court) (ANIL CHOUDHARY) MEMBER(JUDICIAL) (A.K. JYOTISHI) MEMBER (TECHNICAL) Neela reddy 6