Custom, Excise & Service Tax Tribunal
M/S Msp Steel & Power Limited vs Cce, Raipur on 5 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 24/06/2016. DATE OF DECISION : 05/07/2016. Excise Appeal No. 50365 of 2016 (SM) [Arising out of the Order-in-Appeal No. BPO-EXCUS-002-APP-268-15-16 dated 16/12/2015 passed by The Commissioner (Appeals), Customs, Central Excise & Service Tax, Raipur.] For Approval and signature : Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No 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 :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s MSP Steel & Power Limited Appellant Versus CCE, Raipur Respondent
Appearance Ms. Surabhi Sinha, Advocate for the appellant.
Dr. S.K. Sheoran, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 52306/2016 Dated : 05/07/2016 Per. V. Padmanabhan :-
This appeal is directed against the order of the Commissioner (Appeals), Raipur dated 16/12/2015. The dispute pertains to availment of Cenvat credit. The appellant is a manufacturer of Sponge Iron, Billet and TMT Bar falling under Chapter 72. They availed Cenvat credit on purchase of dumper falling under Chapter 87, which was used for shifting, handling and internal transportation of raw material and semi-finished goods inside their factory. They have claimed the Cenvat credit considering the dumpers as accessory of capital goods i.e. conveyor system falling under Chapter 85. Their claim made under Rule 2 (a) (A) (iii) of the Cenvat Credit Rules, 2004 was disallowed by the Original Authority and upheld by the Commissioner (Appeals) vide the impugned order. In the present appeal, such credit is sought as allowable.
2. Heard Ms. Surabhi Sinha, the learned Counsel for the appellant as well as Dr. S.K. Sheoran, the learned DR on behalf of Revenue. Learned Counsel for the appellant sought to place reliance in the case of Banco Products (India) Ltd. vs. CCE, Vadodara I reported in 2009 (235) E.L.T. 636 (Tri. LB) in which the Larger Bench of the Tribunal allowed the Cenvat credit on plastic crates which were used within the factory for movement of raw material, semi-finished as well as finished goods within the factory. He also relied on Tata Steel Ltd. vs. CCE, JSR reported in 2012 (282) E.L.T. 459 (Tri. Kolkata) wherein the Tribunal permitted credit for coke transfer cars which were used for transfer of coke from oven to furnace. He also placed reliance in the case of Malabar Cements Ltd. vs. CCE, Cochin reported in 2002 (149) E.L.T. 751 (Tri. Bang.) in which Modvat credit was allowed for dumpers considering these as capital goods under Erstwhile Rule 57Q. He also took the support of a few other judgments.
3. The learned DR reiterated the findings of the Authorities below and argued that dumper falling under Chapter 87 is not covered by the definition of capital goods given in Rule 2 (a) of the Cenvat Credit Rules, 2004.
4. The definition of capital goods under Rule 2 (a) reads as follows :-
(a) capital goods means :-
The following goods, namely :- (A)
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 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 appliance used in an officer ; or (2) for providing output service ;
(B) motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of Section 65 of the Finance Act.
5. The Cenvat credit has been availed on dumpers which are classifiable under Chapter 87. The usage of the dumpers is for the purpose of shifting, handling and internal transportation of raw material, semi-finished goods as well as finished goods inside the factory of the manufacturer. From the usage as explained above it is evident that the use of dumper is as capital goods and is an essential and integral process required in the manufacture of final product. It has been claimed as an accessory to the conveyor which is classifiable under Chapter 85. The definition of capital goods under Rule 2 (a) does not cover Chapter 87; it covers all goods falling under Chapter 85. I have gone through various decisions cited by the appellant. I find that in the case of Malabar Cements Ltd. vs. CCE, Cochin (supra) the credit for dumpers has been allowed as capital goods under Erstwhile Rule 57Q. It is not in dispute that the Modvat Rules and the subsequent Cenvat Rules are pari-materia. When I refer to the decision of Tata Steel Ltd. vs. CCE, JSR (supra), I find that the Tribunal has allowed the credit on coke transfer cars which are also used within the factory for movement of goods. In the case of Banco Products (India) Ltd. vs. CCE, Vadodara I (supra) the Tribunal has even allowed the credit for plastic crates which are also used for a similar material handling purpose within the factory. The case of Hindustan Zinc Ltd. vs. CCE, Jaipur reported in 2013 (289) E.L.T. 377 (Tri. Del.) cited by the learned DR deals with entirely different matter and pertains to inputs and, hence, not applicable to the facts of the present case. Considering the dumpers as capital goods which are used for the purpose of movement of material within the factory the purpose for which the Tribunal has allowed the Modvat/Cenvat credit for similar capital goods I find no justification to take a different view for dumpers. Accordingly, the impugned order is set aside.
6. In line with the above discussions and the case laws discussed, the appeal is allowed.
(Order pronounced in the open court on 05/07/2016.) (V. Padmanabhan) Member (Technical) PK ??
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