Custom, Excise & Service Tax Tribunal
Jaypee Rewa Plant vs C.C.E. & S.T., Bhopal on 26 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT III
Excise Appeal No.E/4149/2012-EX [SM]
[Arising out of Order-in-Appeal No.183/BPL/2012 dated 13.09.2012 passed by the Commissioner (Appeals), Bhopal]
Jaypee Rewa Plant Appellant
Vs.
C.c.E. & S.T., Bhopal Respondent
Present for the Appellant : Shri.Vipul Agarwal, Advocate Present for the Respondent: Shri.R.K. Mishra, A.R. Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) Date of Hearing/Decision: 26/12/2016 FINAL ORDER NO. __56334/2016__ PER: S.K. MOHANTY
Denial of cenvat credit on various steel items used for fabrication / manufacture of various capital goods installed in the factory is the subject matter of present dispute.
2. Brief facts of the case are that the appellant is engaged in the manufacture of cement and clinker falling under Chapter 25 of the Central Excise Tariff Act, 1985. During the disputed period, the appellant purchased various steel items namely, M.S. Angles, Channels, beams, joists, round, sheets, plates etc. for fabrication/ manufacture of various capital goods installed within the factory. Cenvat credit taken on the disputed goods was denied by the authorities below on the ground that the same are not confirming to the definition of either capital goods or input for availment of the cenvat benefit. To deny the cenvat credit, the ld. Commissioner (Appeals) has relied on the Larger Bench decision of this Tribunal in the case of Vandana Global Ltd. Vs. CCE reported in 2010 (253) E.L.T. 440 (Tri. LB).
3. The ld. Advocate appearing for the appellant submits that the disputed goods were used within the factory for fabrication/ manufacture of various capital goods like Limestone Crusher, Raw Mill Electro Static Precipitator Kiln/ Preheater, Coal Mill, Cement Mill, Packing Plant, Cable Trays etc., classified under Chapter 84/ 85 of the Central Excise Tariff Act, 1985. The ld. Advocate submits that since those disputed goods were used for fabrication / manufacture of eligible capital goods, cenvat benefit on the disputed goods should be available to the appellant. The alternate pleas of the appellant is that since the disputed goods were used within the factory for fabrication/installation of the capital goods, which in turn, were used for manufacture of excisable goods, the same should be eligible for cenvat credit under the head input defined in Rule 2 (k) of the Cenvat Credit Rules, 2004. He further submits that the embargo created in the explanation appended to the definition of input will not have any retrospective application inasmuch as, the period in this case is from April, 2008 to September, 2008; whereas the explanation was inserted in Rule 2 (k) ibid w.e.f. 07.07 2009.. The ld. Advocate rely on the judgment of Honble Gujarat High Court in the case of Mundra Port and Special Economic Zone Ltd. vs. C.C.E. reported in 2015 (39) S.T.R. 726 (Guj.) to state that the explanation appended to Rule 2 (k) on 07.07.2009 will not have any retrospective application and the embargo created therein should apply prospectively.
4. On the other hand, the ld. A.R. appearing for the Revenue reiterates the findings recorded in the impugned order.
5. Heard both sides and perused the records. The period of dispute in this case is from April, 2008 to September, 2008. Explanation 2 appended to the definition of inputs in Rule 2 (k) ibid provided that the goods used in the manufacture of capital goods which are further used in the factory of the manufacture, should fall within the ambit of input for the purpose of availment of cenvat credit. However, the said explanation was amended vide Notification No.16/09-C.E.(N.T.) dated 07.07.2009, which are to the effect that cement, angles, channels, CTD Bars, TMT and other items used for construction of factory shed, building or laying foundation or making of structure for support of capital goods were excluded from the purview of the definition of input. The issue as to whether the amendment of the definition w.e.f. 07.07.2009 will apply prospectively or will have retrospective application, was the subject matter of dispute before various judicial forums. The Honble Gujarat High Court in the case of Mundra Port and Special Economic Zone Ltd. (Supra) have held that the explanation inserted in Rule 2 (k) is not clarificatory in nature and the same is effective from the date, when the same was brought in to the statute book. The relevant paragraph in the said judgment is extracted herein below.
8.?Mr. Y.N. Ravani, learned counsel for the Revenue has placed reliance on the decision of the Larger Bench of the Tribunal in Vandana Global Limited v. Commissioner of Central Excise, Raipur, 2010 (253) E.L.T. 440. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7-7-2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited v. Union of India and Others, reported in (2011) 11 SCC 408 = 2011 (266) E.L.T. 145 (S.C.) would not be applicable to the facts of the instant case.
6. In view of the settled position of law and view of the fact that the disputed goods were procured prior to the date of amendment of Rule 2 (k) ibid, cenvat benefit on the disputed goods cannot be denied to the appellant. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant with consequential relief, if any, as per law.
[Dictated and pronounced in the Open Court] (S.K. MOHANTY) MEMBER (JUDICIAL) Anita 0 4 Excise Appeal No.E/4149/2012-EX [SM]