Custom, Excise & Service Tax Tribunal
Cce, Chennai vs M/S. Ennore Foundaries on 6 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI E/255/2003 (Arising out of Order in Appeal No. 8/2003 (M-I) dated 29.01.2003, passed by the Commissioner of Central Excise, (Appeals), Trichy). For approval and signature Honble Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member CCE, Chennai : Appellant Vs. M/s. Ennore Foundaries : Respondent
Appearance Ms. Indira Sisupal, JCDR, for the appellant Shri M. Kannan, Adv., for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 06.07.09 Date of decision : 06.07.09 Final ORDER No._____________ Per: Dr. Chittaranjan Satapathy, Heard both sides. The respondents have been using inputs for manufacture of components parts of capital goods and further used them for manufacture of capital goods within their factory. Such capital goods are used for the manufacture of dutiable finished goods. The department seeks to deny them credit on the inputs since the components of capital goods are exempted under Notification No. 67/95 dated 16.03.95 when taken for internal consumption.
2. We find that the very same issue has been dealt with the Tribunal earlier in the case of SAIL Vs. CCE, Ranchi reported in 2008 (222) ELT 233 (Tri.-Kolkata), allowing input duty credit in such a case in view of the decision of the Honble Supreme Court in the case of Collector Vs. Hindustan Sanitaryware and Industries reported in 2002 (145) ELT 3 (S.C.). Para 16 of the cited decision in the case of SAIL (supra) is as follows:-
16.As regards other inputs, such as castings, rounds, plates etc. used for manufacture of machine parts, we note that the machine parts themselves being capital goods are exempted under Notification 67/95. However, following the cited decision of the Honble Supreme Court in the case of Hindustan Sanitaryware (cited supra) and recognizing that machine parts are defined as capital goods for the purposes of both Notification 67/95 as well as Rule 57Q, we are of the view that the appellants are entitled to exemption on the inputs under the Notification 67/95 when produced within the factory and they are entitled to Modvat credit when such inputs are procured on payment of duty from outside. In this regard, we note that the decision of the Honble Supreme Court in the case of Hindustan Sanitaryware (cited supra) allowed exemption to plaster of paris used for making of moulds which were used in turn in relation to the dutiable sanitaryware. We also find that the said decision has been followed by the Tribunal in several other cases noted above. The machine parts manufactured by the appellants within the factory either out of the inputs manufactured by them or procured by them from outside are on the same footing as the moulds made from plaster of paris in the case of Hindustan Sanitaryware and hence the ratio of the said decision of the Honble Supreme Court would permit exemption to the impugned inputs manufactured and used by the appellants under Notification 67/95 and would permit credit under the Modvat Rules when brought from outside.
3. In view of the fact that in similar cases, input duty credit has been allowed under the cited decision of the Tribunal in the case of SAIL (supra), we find no infirmity in the order passed by the lower appellate authority. Consequently, the departments appeal is dismissed.
(Order dictated and pronounced in the open Court)
(C. SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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