Custom, Excise & Service Tax Tribunal
M/S Modi Arc Electrode Company vs C.C.E. Ghaziabad on 11 August, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH: ALLAHABAD
SINGLE MEMBER BENCH
Appeal No. E/2282/2011-EX(SM)
Dated of Hearing/decision: 11/08/2016
[Arising out of Order-in-Appeal No. 97-CE/GZB/2011-12 dated 30.05.2011 passed by Commissioner (Appeals), Central Excise & Customs, Ghaziabad]
For approval and signature:
Honble Shri Anil Choudhary, Judicial Member
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s Modi Arc Electrode Company Appellant
Vs.
C.C.E. Ghaziabad Respondent
Appearance:
Present for the Appellant: Shri Prabhat Kumar, Advocate Present for the Respondent: Shri D.K. Deb (Assistant Commissioner) A.R. Coram: Honble Shri Anil Choudhary, Member (Judicial) Final Order No.70684/2016 Per: Anil Choudhary The appellant M/s Modi Arc Electrodes Company (A unit of Modi Industries Ltd.), is in appeal against Order-in-Appeal dated 30.5.2011. Cenvat credit disallowance of Rs.2,30,256/- have been upheld for the period June, 2006 to March, 2007.
2. Heard the parties.
3. A Show Cause Notice dated 27.01.2009, served on 01.12.2009 wherein pursuant to audit it was noticed by Revenue that appellant have sent a damaged transformer for repair on job-works. Further it appeared that the appellant, manufacturer of welding electrodes have taken Cenvat Credit on goods, namely angles, plates, channels and joists during March, 2007 for Rs.2,30,256/-. It appeared to Revenue that angle, channels, etc. are neither inputs nor capital goods for the manufacture of welding electrodes. It further appeared that the credit availed and utilized is irregular and is required to be reversed along with interest. The appellant vide their letter prior to Show Cause Notice dated 10.4.2008, refused to debit/reverse the above said credit involved. The appellant vide their letter dated 05.12.2009 submitted the self attested copy of relevant documents on the basis of which they had availed credit. Further penalty was proposed under Rule 15 of Cenvat Credit Rules read with Section 11AC of the Act.
4. The appellant contested the Show Cause Notice by filling reply. So far angles are concerned it was explained that the same have been used in making wire frames, oven trolley & baking stands. The wire frames so made out from angles are used to keep raw electrodes, which are shifted from intermediate stage of processing of wire electrodes to other place where the oven trolleys are available. The wire frames are put on the oven trolleys and then the trolleys are shifted to baking stand and baking stands are pushed in the baking oven. After the completion of baking the electrodes stands are shifted to the de-humidifying room for the safe preservation of electrodes from moisture, etc. and thereafter are packed in boxes. So for plates are concerned these are laid down in the wire drawing areas. Appellant, purchases the main inputs, as required, namely wire Rods of different thickness which are drawn by them as per the requirement, the coil of wire rods is kept at one corner and the drawing machine of wire is fixed at another corner at a distance of about 10 meter. The wire rod move from one corner to another corner through the surface wherein these plates are laid down for quick movement of rod. Thus plates have been used in the process of production of excisable welding electrodes. So far channels are concerned these are used for manufacturing items like trolley for flux container, oven shifting trolleys, material shifting trolleys, electrodes stand, hydraulic trolleys and wire frames etc. The trolley for flux container are used to hold the container of flux and shifted to read mixer for mixing the flux and such a mix flux are used for manufacture of electrode, trolley are used for placing the unbaked electrodes for the purpose of baking as already noticed hereinabove. Material shifting trolleys are used to shift unbaked electrodes from the process to soft floor, so that unbaked electrodes can be aired dried before baking. The baking electrodes stand is used in oven for baking the electrode, then shifted to the de-humidifying room for further process. Hydraulic trolleys are used for shifting the electrodes from production area to the packing area. Wireframes are used for, to shifting & drying and for further processing or manufacture. Further angle, channels etc. are also used for the purpose of testing of welding electrodes to ascertain whether the electrodes are of the requisite quality, strength etc. Vide Order-in-Original dated 15.11.2010 the proposed demand was confirmed with equal amount of penalty amounting to Rs.2,31,810/- under Rule 15 of CCR, read with 11AC of the Act.
5. Being aggrieved the appellant preferred appeal before ld. Commissioner (Appeals) who recorded the finding that the contention of the appellant that angles, plates, channels and joists etc. were used in the manufacture/maintenance of various machinery/parts, namely wire rods, trolley, for flux container, oven shifting trolleys, material shifting trolleys, electrodes stands, hydraulic trolley and wire frames etc. which in turn were used in or in relation to the manufacture of the final products and thus the items in question have been used in relation to the manufacture of final product, under explanation to Rule 2(K) of Cenvat Credit Rules, 2004, as submitted by the appellant. But the appellant could not furnish the documentary evidence viz. Diagram/floor chart showing use or installation of the said goods in their factory. The appellant have also not cited any case law/judgement or Board Circular to substantiate the said claim. Accordingly, the Cenvat credit disallowed is justified and accordingly confirmed the same. So far penalty is concerned it was observed that the matter involves interpretation of statute and the facts on record do not suggest any malafide intention on the part of the appellant and accordingly the penalty imposed are deleted.
6. Being aggrieved the appellant is in appeal before this Tribunal on the ground that in view of the finding of ld. Commissioner (Appeals) that there is no malafide and/or contumacious conduct on the part of the appellant, Accordingly, it is urged that extended period of limitation is also not available to revenue as the whole demand relate to the period beyond one year from the date of show cause notice being 27.1.2009.
7. The ld. A.R. for Revenue relies on the impugned order.
8. Having heard the rival contentions, I am satisfied that the extended period of limitation is not invokable in the facts and circumstances of the case. Accordingly I hold that the Show Cause Notice is bad. Accordingly, I set aside the impugned order to the extent it have confirmed the disallowance of Cenvat credit for Rs.2,30,256/-. The appellant is entitled to consequential benefits in accordance with law.
(Dictated and pronounced in the open Court) (ANIL CHOUDHARY) MEMBER (JUDICIAL) (K. Gupta) 1 Appeal No. E/2282/2011-EX(SM)