Custom, Excise & Service Tax Tribunal
West Coast Paper Mills Pvt. Ltd vs Commissioner Of Central Excise And ... on 29 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/1162/2009-SM [Arising out of Order-in-Appeal No. 425/2009 dated 20/10/2009 passed by the Commissioner of Central Excise, Mangalore] For approval and signature: HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes West Coast Paper Mills Pvt. Ltd. Bangur Nagar, Dandeli - 581 325, Karnataka Appellant(s) Versus Commissioner of Central Excise and Service Tax, Mangalore 7th Floor, Trade Centre, Bunts Hostel Road, Mangalore 575 003 Karnataka Respondent(s)
Appearance:
Mr. Babu Reddy, Advocate For the Appellant Mr. Mohd Yusuf, AR For the Respondent Date of Hearing: 29/05/2015 Date of Decision: 29/05/2015 CORAM:
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. 21222 / 2015 Per : ARCHANA WADHWA The appellants have filed written submissions which stand placed on record by the learned advocate Mr. Babu Reddy. I have gone through the same as also the impugned order and heard learned DR.
2. Cenvat credit of Rs. 1,32,439/- (Rupees One Lakh Thirty Two Thousand Four Hundred and Thirty Nine only) availed by the appellant on cement during the period September 2007 to February 2008 stands denied on the ground that the same has been used in the construction of chimney and for construction of foundation of machinery. The appellants stand is that out of this amount, an amount of Rs. 81,113/- (Rupees Eighty One Thousand One Hundred and Thirteen only) was relatable to construction of foundation of machinery and in terms of Rajasthan High Court decision in the case of Union of India Vs. Hindustan Zinc Ltd. [2007 (218) E.L.T. 503 (Raj.)], the cenvat credit is not available. As such they are not contesting the demand. Further the balance amount of Rs. 51,326/- (Rupees Fifty One Thousand Three Hundred and Twenty Six only) was used for construction of chimney, which is a part of the pollution control system and covered by the definition of capital goods appearing under Rule 2(A) (ii) of the Cenvat Credit Rules. As per explanation 2 (2) (k) inputs include items used by the manufacturer in the manufacture of capital goods which are further used in the factory of manufacturer. As such it is their contention that the said credit is admissible to them. They have also appealed the imposition of penalty of Rs. 10,000/- (Rupees Ten Thousand only) on the appellant under Rule 25 of the Central Excise Rules.
3. In view of the above I confirm the demand of Rs. 81,113/- (Rupees Eighty One Thousand One Hundred and Thirteen only). As regards the demand of Rs. 51,326/- (Rupees Fifty One Thousand Three Hundred and Twenty Six only), I agree with the appellant that the inputs having been used in the construction of the chimney, which was a part of the pollution control system, the benefit of cenvat credit cannot be denied to them. Accordingly the same is allowed.
4. As regards penalty of Rs. 10,000/- (Rupees Ten Thousand only), I find that the credit was availed after reflecting the same in statutory documents and the issue was also a contentious and debatable issue. It is not a case of any malafide on the part of the assessee so as to attract the penal provisions. Accordingly penalty of Rs. 10,000/- (Rupees Ten Thousand only) is also set aside. Appeal is disposed of in above terms.
(Order pronounced in open court) (ARCHANA WADHWA) JUDICIAL MEMBER iss