Custom, Excise & Service Tax Tribunal
M/S.Savitri Concast Ltd vs Cce & St, Jaipur-I on 2 February, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:22.01.2016
Date of Decision:02.02.2016
Excise Appeal No.56245/2013-EX(SM)
[(Arising out of Order-in-Appeal No. 07(RDN CE/JPR-I/2013 dated 11.01.2013 passed by the Commissioner of Central Excise & Customs, Jaipur)]
For approval and signature:
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s.Savitri Concast Ltd. ...Appellants
Vs.
CCE & ST, Jaipur-I Respondent
Appearance:
Rep. by Shri Nirmal Goyal, Advocate for the appellant.
Rep. by Shri M.R. Sharma, AR for the respondent.
Coram: Honble Shri B. Ravichandran, Member (Technical) Final Order No. 50123/2016 Dated:2.2.2016 Per B. Ravichandran:
The present appeal is against the order dated 11.01.2013 of Commissioner (Appeals)-I, Jaipur. The respondents are engaged in the manufacture of M.S. Ingots liable to central excise duty. The officers of Central Excise Department conducted audit of the accounts of the appellant. Thereafter, proceedings were initiated to disallow cover of cenvat credit of Rs.4,55,595/- availed by the appellant on old and used plates, steel bars, beam, M.S. angles under the category of capital goods. The case was adjudicated vide order dated 30.06.2011 and the Original Authority ordered the recovery of the above said amount and imposed equal penalty. On appeal, the Commissioner (Appeals) vide the impugned order upheld the original order. Aggrieved by this, the appellant filed this appeal.
2. Ld. Counsel for the appellants submitted that the cenvat credit taken on the above mentioned items are rightly eligible to them. These items were used for making structures for support of capital goods and as such, the cenvat credit was admissible to them. Without the above structures, the capital goods will not function. These items were correctly covered as eligible inputs in terms of Rule 2(k) of Cenvat Credit Rules, 2004 as they form part of essential structures. He relied on the case laws in support of his submissions. He also contested the demand on the question of time bar. The issue involved was subject matter of interpretation and he pleaded that there is no suppression of fact.
3. Ld. AR, on the other hand, reiterated the findings of the Lower Authorities and stated that the old and used plates, M.S. Angles, etc. were admittedly used for making foundation and supporting structures and are not used for making any identifiable capital goods. As such, he submitted that the appellants are not eligible for cenvat credit.
4. Heard both the sides and examined the appeal records.
5. It is seen that from the beginning the appellants have submitted that they have used these old and used plates, HSD Steel Bars, Beams, M.S. Angles, etc. falling under Chapter 72 of Central Excise Tariff for making of the structures, which support the capital goods. Their claim for credit on these items is based on the argument that the emerging structures are also to be considered as capital goods. I find that the appellants did not submit even the details of such support structures, which as per their claim, are integral and necessary for the functioning of any capital goods in their factory. They have mentioned that they have made certain structures to support the crane, storage tanks, etc. without giving the actual description of the quantum of inputs used and the nature of output structures. In the face of admitted facts, there is no identifiable capital goods for which these inputs were used. It is not possible to consider the eligibility of the appellant for cenvat credit under the category of inputs. I find that the case laws relied upon by the appellant in their appeals is not of any assistance to them. In the case of Hindalco Industries Ltd. 2012 (286) ELT 503 (Karnataka), the Honble Karnataka High Court held that the M.S. Plates and H.R. Coils used in the fabrication of storage/tank/structures are eligible. Similarly, in the case of Hindalco Cement Ltd. 2012 (285) ELT 341 (Madras), the Honble Madras High Court held that CTD Bars, Steel and Cement used for construction of Silos for storing raw materials, tower structures, etc. are essential as they are capital goods, on which credits are eligible. I find in the present case, the appellant did not use the impugned items for any capital goods and admittedly, certain support structures were fabricated by them. Even the nature of such support structures that how they are linked and essential for the functioning of the capital goods has not been explained. In such circumstances, the credit claimed by the appellant has been rightly denied by the lower authorities. I find that in the present appeal also, the appellant could not make out a clear case of their eligibility either under the category of input or capital goods. Hence, there is no reason to interfere with the impugned order on the eligibility of cenvat credit. However, I find invoking the extended period of demand and imposing equal penalty is not justifiable in the facts and circumstances of the case. It is a fact that the cenvat credit eligibility on M.S. Sheets, angles, etc. used by the manufacturer in fabrication of structures or capital goods has been a subject matter of considerable litigation. The issue, especially relating to M.S. Items, used in fabrication of support structures has also been matter of dispute including a decision by the Larger Bench of the Tribunal in the case of Vandana Global Ltd. 2010 (253) ELT 440 (Tribunal-LB). There is no case for suppression of fact with intention to evade in such circumstances.
6. Considering the above position, I find that the proceedings, which were initiated based on the audit scrutiny of the accounts maintained by the appellant, cannot be the basis for extended period of demand and accordingly, the demand should be restricted to the normal period. The penalty imposed equal to the disallowed credit by the lower authorities is also set aside. The appeal is disposed of in the above terms.
[Order pronounced in open court on 2.2.2016.] ( B. Ravichandran ) Member (Technical) Ckp.
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