Custom, Excise & Service Tax Tribunal
M/S Chadha Rubber (P) Ltd vs Cce, Meerut-Ii on 6 July, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 6.7.2012
Excise Appeal No. 2965 of 2011-SM
[Arising out of the Order-in-Appeal No. 98-CE/MRT-II/2010 dated 19.4.2011 passed by the Commissioner (Appeals), Central Excise, Meerut]
For Approval & signature :
Honble Shri Mathew John, 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?
M/s Chadha Rubber (P) Ltd. Appellant
Vs.
CCE, Meerut-II Respondent
Appearance:
Appeared for Appellant : None
Appeared for Respondent : Shri Sanjay Jain, Advocate
CORAM: Honble Shri Mathew John, Member (Technical)
Order No.dated.
Per Mathew John:
When the case was called, nobody appeared for the appellant. However, there is a letter from the appellant to decide the case on merits based on records available. The issue in this case is that the appellant had taken Cenvat credit of Rs.71,288/- on MS Plates of iron and steel held to be used in the repair of moulds used in the manufacture of excisable product namely rubber. The adjudicating authority held that Cenvat credit could be taken on such goods. Revenue was aggrieved that the order of the adjudicating authority and they filed appeal with the Commissioner (Appeals) who has held that such goods cannot be considered to be inputs in the manufacture of their final product.
2. The contention of the appellants is that it is nowhere stated in the SCN or the adjudication order that the impugned goods were used for repair of moulds. The appellants contend that this is a finding introduced by Commissioner (Appeal), without any basis and travels beyond the scope of Show Cause Notice.
3. The appellant has further submitted that the credit was taken on the bonafide belief that they were eligible for such credit for goods used along with moulds and credits taken were reported in ER-1 returns filed. So the demand issued invoking extended period of time is not maintainable and therefore the order of the Commissioner (Appeal) is not maintainable.
4. It is the submission of Ld. A.R. for Revenue that the adjudicating authority gave relief based on the argument that M. S. Sheets were used with moulds which are capital goods. Further the adjudicating authority has relied on CBEC Circular 354/141/96 TRU dated 2-12-96. This circular was in respect of parts, components and accessories which are to be used with capital goods. In this case the M.S. Plates were used in repair and hence cannot be considered as part, component or accessory. Further the appellants have not produced any evidence to prove that the goods were in fact used along with moulds or in repair of the moulds.
5. The issue whether M.S. plates, beam, angles, channels etc. used for repair and maintenance of machinery, is eligible for Cenvat credit was examined by the Tribunal in the case of Birla Corporation Ltd. Vs. CCE-reported at 2012 (276) E.L.T. 376 (Tri. Del) and it has been held that credit on such items are available. The Tribunal relied on the decision of Rajasthan High Court in the case of Union of India v. Hindustan Zinc Ltd.- 2007 (214) E.L.T. 510 (Raj.) as affirmed by the Hon Apex Court reported at -2007 (214) E.L.T. A115 (S.C.).
6. Mould is an item of capital goods as per definition at Rule 2 (a) of Cenvat Credit Rules. As per the finding of the Commissioner (Appeal) the items were used for repair of the moulds. If it is used for repair and maintenance of moulds it is eligible for credit as per the decision in the case of Hindustan Zinc Ltd. The SCN is issued without ascertaining the actual use of the impugned M. S. Sheets. It is issued only on the ground that no item falling under chapter 72 of the Central Excise Tariff can be considered as capital goods. This argument has not been agreed to in the decisions cited above. Considering the small amount involved in this case I do not find it necessary to remand the matter for a denovo adjudication on the manner in which the impugned goods were used because it will be rather difficult to ascertain its actual use 6 to 8 years after its use.
7. In such a situation the SCN issued invoking extended period of time is not maintainable.
8. In view of the discussions above I allow the appeal with consequential relief.
Mathew John (Technical Member) RM