Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S. Smc Power Generation Ltd on 18 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/76001/2017
(Arising out of Order-in-Appeal No.182/CE/RKL/2017 dated 28.02.2017 passed by the Commissioner (Appeals), Central Excise, Customs & Service Tax, Bhubaneswar)
Commissioner of Central Excise & Service Tax, Rourkela
Applicant (s)/Appellant (s)
Vs.
M/s. SMC Power Generation Ltd.
Respondent (s)
Appearance:
Shri S.Mukhopadhyay, Suptd. (AR) for the Appellant (s) Shri Aalok Arora, Advocate for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing:- 18.01.2018 Date of Pronouncement:28.02.2018 ORDER NO.FO/75208/2018 Per Shri P.K.Choudhary
1. Briefly stated the facts of the case are that the Assessee is engaged in the manufacture of Sponge Iron classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. Show Cause Notices were issued alleging irregular availment of Cenvat Credit on Angle, Channel, CTB Bars, Cement, Welding Electrode etc. during the period from November 2005 to August 2009. The Adjudicating authority confirmed recovery of Cenvat Credit of Rs. 16,51,971.00 along with Interest and imposed penalty of equal amount of Cenvat Credit. By the impugned Order, the Commissioner (Appeals) set aside the Adjudication Order to the extent of denying the credit on impugned items and welding electrodes. Hence, the Revenue filed this appeal.
2. Heard both sides and perused the appeal records.
3. The Learned D/R for the Revenue reiterates the Grounds of Appeal. The Revenue in their Grounds of Appeal stated that the Larger Bench of the Tribunal in the case of Vandana Global Limited Vs. CCE. Raipur 2010 (253) ELT 440 held that Cenvat Credit cannot be allowed on goods like Cement and various structural steel items when used for laying foundation and building supporting structure. He also cited various decisions.
4. On perusal of the impugned Order I find that the Adjudicating authority at one hand is accepting the Verification Report of the Range Superintendent but denying the Cenvat Credit on the said items by treating them as used for making support structure. It is seen from the impugned Order that the said items were used for making various machine/machinery parts and accessories thereof such as Bag Filter, Bag Filter Roof, Chimney etc. The Revenue had not seriously contested the use of the items in their appeal. The Learned Counsel relied upon the following decisions
1. Final Order No.F/77013/2017 dated 28.8.2017 of Divisional Bench of CESTAT, Kolkata in the case of CCE, BBSR-II vs. M/s.
SMC Power Generation Ltd.
2. Final Order No.F/76328/2017 dated 12.7.2017 of Divisional Bench of CESTAT, Kolkata in the case of CCE, BBSR-II vs. M/s. SPS Steel & Power Ltd.
3. Honble Cestat judgment in the case of Singhal Enterprises Pvt. Ltd. vs. CCE, Raipur reported in 2016(341) ELT 372(Tri.-Del.)
4. CCE, Salem V Madras Aluminium Co. Ltd. [2017(349) ELT 133(Mad.)]. The judgment has been affirmed by the Honble Supreme Court reported in 2017(345) ELT A192-193.
5. Mundra Port & Special Economic Zone Ltd. vs. CCE [2015(39)STR726(Guj.)] In the case of the Commissioner of Central Excise and Customs Vs. SMC Power Generation Limited, the appellants own case, vide Order dated 28.08.2017, the Tribunal dismissed the appeal filed by the Revenue. The relevant portion of the said judgement is reproduced below :-
5. From the record it appears that identical issue has come up before the Tribunal in the following cases:
(i) Singhal Enterprises Pvt. Ltd. vs. CCE, Raipur [2016(341) ELT 372 (Tri.-Del.)]
(ii) Ultratech Cement Ltd. vs. CCE, Jaipur-I [2017-TIOL-141-CESTAT-DEL]
(iii) Mangalam Cement Ltd. vs. CCE, Jaipur [2017-TIOL-141-CESTAT-DEL] In the case of Mangalam Cement Ltd. vs. CCE, jaipur (supra) it was observed by the Tribunal as under :
We find that the controversy can be laid to rest by making a reference to the decision of the Apex Court in the case of CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. (supra), wherein the Honble Supreme Court has considered an identical issue of steel plates and MS Channels used in the erection of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgement, the Apex Court has referred to the user test evolved by the Apex Court in the case of CCE, Coimbatore vs. Jawahar Mills Ltd. 2001 (132) ELT 3 (SC)= 2002-TIO-87-SC-CX, which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the user test to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as kiln, material handling conveyor system, furnace etc. cannot be suspended in mid air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structural items, will have to be considered as parts of the relevant machines. The definition of capital goods includes, components, spares and accessories of such capital goods. Accordingly, applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of capital goods as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit. By following our earlier order, we find no reason to interfere with the impugned order. Accordingly, the impugned order is upheld for the reasons mentioned therein and the appeal filed by the Revenue is dismissed.
5. In view of the above decision of the Tribunal in the assessees own case the appeal filed by the Revenue is dismissed.
(Pronounced in the open court on 28.02.2018) S/d.
(P.K.Choudhary) MEMBER (JUDICIAL) ss 4 Appeal No. E/76001/2017