Custom, Excise & Service Tax Tribunal
M/S. Orient Cement Ltd vs Cc,Ce&St(Appeals-I&Ii), Hyderabad on 29 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/26271-26272/2013 (Arising out of Order-in-Appeal No.3/2013(H-I)(D) CE & 16/2013 (H-I)CE dt.30/01/2013 & No.2/2013(H-I)(D) CE & 17/2013 (H-I)CE dt. 30/01/2013 passed by CC,CE&ST(Appeals-I&III) dt. Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Orient Cement Ltd. ..Appellant(s) Vs. CC,CE&ST(Appeals-I&II), Hyderabad ..Respondent(s)
Appearance Mrs. Rukmani Menon, Advocate for the appellant.
Shri R.K. Raman, Authorised representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:29/01/2016 Date of decision:29/01/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The issue involved is the denial of credit on welding electrodes.
2. The appellants are manufacturers of cement and clinker falling under chapter 25 of Central Excise Tariff Act, 1985 and are also availing credit on inputs. A show-cause notice was served upon the appellants alleging wrong availment of credit on welding electrodes and gases under the category of inputs. After due process of law, the original authority disallowed the credit of Rs.3,29,224/- availed on welding electrodes and gases, and confirmed the demand along with interest. But no penalty was imposed under Rule 15(1). The Department filed appeal before the Commissioner(Appeals) challenging the non-imposition of penalty. The appellants also filed appeal against the disallowance of credit. The Commissioner(Appeals) vide the order impugned herein allowed the appeal filed by Department and imposed penalty of Rs.25,000/- under Rule 15(1) of CENVAT Credit Rules, 2004. The appeal filed by the appellants herein was dismissed by holding that credit on welding electrodes and gases used for repair of capital goods is not admissible. Being aggrieved, the appellants have preferred the present appeal.
3. The learned counsel for appellant submitted that the welding electrodes and gases was used for repair and maintenance of capital goods. These items used for wear and tear repair of plant and machinery is to be considered as input and that such repair is essential for the manufacture of final products. The appellants had provided the details of credit availed in statements filed along with ER-1 returns. If the repairs are not carried out, the manufacture of the final products would come to standstill. That these items satisfy the definition of inputs used directly or indirectly in the manufacture of final products. He placed reliance on the decision of CESTAT passed in CCE&ST, Mangalore Vs. The West Coast Paper Mills Ltd. and West Coast Paper Mills Ltd. Vs. CCE&ST, Mangalore in Final Order No.21052-21053/2015 dt. 01/05/2015. He argued that the Tribunal in the said decision has considered the judgments rendered in Kisan Co-Operative Sugar Factory Ltd. Vs. CCE, Meerut [2013(296) ELT 523 (Tri. Del.)] and that of Sree Rayalseema Hi-Strength Hypo Ltd. Vs. Commissioner [2012(278) ELT 167 (AP)].
4. Against this, the learned AR strongly argued that credit on welding electrodes used for repair and maintenance is not admissible. He placed reliance on the judgment laid in Sree Rayalseema Hi-Strength Hypo Ltd. case (supra). He pleaded that the appeal may be dismissed.
5. I have heard the rival submissions. The issue involved is whether CENVAT credit is admissible in respect of welding electrodes and gases used for repair and maintenance of plant and machinery. In Kisan Co-Operative Sugar Factory Ltd. Vs. CCE, Meerut-I, the Tribunal has considered the various judgments on the issue. It was observed therein that in Sree Rayalseema Hi Strength Hypo Ltd., the Honble Court has not considered the point as to whether manufacturing operations was commercially feasible without regular repair and maintenance of the plant and machinery by using welding electrodes. The said view as followed by Tribunal in West Coast Paper Mills Ltd. case (supra) Final Order No.21052-21053/2015 dt. 01/05/2015. Following the decision, I am of the view that the impugned order is not sustainable.
6. In the result, the impugned order is set aside and appeals are allowed with consequential reliefs, if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
4