Custom, Excise & Service Tax Tribunal
Jindal Steel & Power Ltd vs Cce & St, Raipur on 9 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:19.10.2016
Date of Decision: 09.11.2016
Excise Appeals Nos.56730 and 56731/2013-EX(DB)
[Arising out of Order-in-Original No.COMMISSIONER/RPR/CEX/123/2012 dated 31.12.2012 & Order-in-Original No.COMMISSIONER/RPR/CEX/124/2012 dated 31.12.2012 of the Commissioner of Customs & Central Excise, Raipur(C.G.)]
Jindal Steel & Power Ltd. Appellant
Vs.
CCE & ST, Raipur Respondent
Appearance:
Rep. by Shri H.V. Girinikar, CA for the appellants.
Rep. by Shri Yogesh Agarwal, DR for the respondent.
Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) Final Order No.54948-54949/2016 Per B. Ravichandran:
These are two appeals dealing with similar issues covering different periods and are taken up together for disposal. The appellants are engaged in the manufacture of sponge iron, which in turn is used in the manufacture of bloom /billets. A part of billets are used for the manufacture of rolled products such as structural steel and rail and such rolled products are used for further manufacture of various structures in Beam Welding Units and in the manufacture of crane and its components, which are later cleared on payment of duty. The issue involved in the present appeals is the correctness of cenvat credit availed on structural steel used in the manufacture of final products cleared on payment of duty, credit availed on rail, railway track materials and JO trucks. The Original Authority denied the credit on these items.
2. Ld. Consultant appearing on behalf of the appellants submitted that the various items on which credit has been taken by the appellant were rightly eligible for the same. He mainly relied on the decisions in the appellants own case by the Commissioner, Commissioner (Appeals) and Tribunal on various occasions. The summary of his submission are as below:-
(a) input stage cenvat credit on structural steel and rail/crane rail used in the manufacture of the final product, which are cleared on payment of duty are rightly eligible for credit. Reliance is placed on the order dated 24.10.2007 of Commissioner, Raipur, order-in-appeal dated 15.05.2012 of Commissioner (Appeals), Raipur and order dated 21.11.2013 of Commissioner, Raipur in their own case for different periods.
(b) Cenvat credit on rails/MBC Concrete sleepers used in railway line within the factory premises and further used for movement of locomotives and carriage vehicles for transportation of raw materials, finished goods and final products within the plant premises are eligible for credit. Reliance was placed on Order-in-Appeal of Commissioner (Appeals), Raipur dated 25.02.2010, Order-in-Original dated 29.06.2015 of Commissioner, Raipur and Final Order dated 5.5.2016 of the Tribunal in appellants own case.
(c) Cenvat credit on JO trucks is rightly available as these are material handling equipments, which are used for transportation of raw materials within the premises of manufacturing unit.
(d) The department cannot take divergent view. As can be seen from the above narration, the Department has been taking inconsistent view changing the stand even against an order which has attained finality. For the legal position, reliance was placed on the decision of the Honble Gujarat High Court in the case of Cargill India Ltd. 2013 (288) ELT 209.
(e) Ld. Consultant for the appellant also submitted list of documents, which are not considered by the lower authorities while examining the dispute regarding eligibility of various items for credit.
3. Ld. AR defended the impugned orders and submitted that the orders contain detailed reasons supported by law for denial of credits. The cenvat credit has been correctly denied as these items do not fall under the category of either inputs or capital goods. It was further submitted that the major portion of the credit denied relates to duty paid goods used as raw materials for manufacture of structures and cranes, which are removed on payment of duty. It was submitted that it is for the appellant to satisfactorily establish such usage and later clearance on payment of duty.
4. We have heard both the sides and perused the appeals records including the written submissions and various case laws submitted during the course of hearing. We consider the various category of goods, item-wise, for their eligibility.
5. The first issue is regarding the eligibility of the appellants for the credit on duty paid on beams, columns, structures, fabricated columns used as inputs for manufacture of structures and cranes, which were removed on payment of appropriate duty. The denial of credit in this regard is on the ground that the appellants could not produce relevant details with supporting documents in support of their claim for availment of cenvat credit. The Original Authority relied on Rule 9(5) of Cenvat Credit Rules to hold that the appellants failed to support their claim. We note that the appellants submitted daily production reports relating to structures and cranes, daily stock account of finished goods, invoice-wise statement of clearance of crane and crane parts, invoice-wise clearance of structure along with sample invoices, statement of all such clearances of cranes/structures on payment of duty along with invoices in support of their claim that cenvat credit is rightly eligible on the steel items used in the manufacture of structural steel, which are cleared on payment of duty. We find that the Commissioner of Central Excise, Raipur in his order dated 21.11.2013 in the appellants own case covering the period April, 2012 to December, 2012 held that the inputs were used as raw materials, which were evidently contained in final products cleared on payment of appropriate duty. He discounted the contention of the Revenue that these goods are the support structures for mounting machines and as such, are not machines or components and hence, not eligible for credit. It was categorically recorded that such assertion in the show cause notice was erroneous in view of the facts examined by the Original Authority. He accordingly allowed the credit on M.S. Angles, Beams, Crane Rails and Rails to the appellants. The order covered the duty credit on these steel items used in Crane Manufacturing Division and also in Beam Welding Unit of the factory. The Original Authority also allowed credit on PSC sleepers stating that railway tracking materials, on which molten metal was carried is used for movement of raw materials, semi-finished goods and finished goods within the factory and as such, eligible for credit.
6. Considering the detailed documents submitted by the appellant regarding duty paid clearances of the goods manufactured /fabricated in their factory using these M.S. Items and also the Departments view taken in the order mentioned above in the appellants own case for the subsequent period, we find no justification for denial of credit on these items in the impugned orders. Regarding cenvat credit on rails, MBC concrete sleepers used in railway line, as mentioned above, the credit has been allowed to the appellant in subsequent orders. Reference can also be made to the order dated 25.02.2010 of the Commissioner (Appeals) in the appellants own case, where credit has been allowed on railway, MBC concrete sleepers as inputs. Similarly, credit has been allowed on beams, angles, columns and rails used in the manufacture of capital goods, which are cleared on payment of duty.
7. Regarding admissibility of credit on JO trucks, admittedly, the said trucks were used for transportation of raw materials within the factory premises. We have perused the technical write up and photographs of the said JO trucks. These are four wheeled industrial platform truck for horizontal movement of heavy material upto 2 MTs. These are basically material handling equipments operated within the premises of the factory. We note that the credit on such JO truck has been allowed by the Tribunal in the appellants own case vide Final Order No.51754/2016 dated 5.5.2016. The said order also allowed cenvat credit in respect of railway track materials following the decision in the appellants own case vide Final Order No.52840 of 2015 dated 9.9.2015. For JO trucks, reliance was placed on earlier decision in the appellants own case vide Final Order No.52994 of 2015 dated 8.3.2015.
8. Both the impugned orders dealt with credit availability of same type of items for different periods. The periods covered in the two proceedings are July, 2010 to May,2011 and June, 2011 to March, 2012. The only additional issue involved for the period June,2011 to March, 2012 is for a credit of Rs.4,21,294/-, which was denied on steel furnitures. The appellant contended that these furnitures were used in the Information Technology Department within the campus of the factory. They relied on the Boards circular dated 29.4.2011 to submit that the goods such as furniture and stationery used in an office within the factory are used in relation to the manufacturing business and hence, the credit of the same is allowed. We find justification in the claim of the appellant.
9. In view of detailed analysis as above, we note that the matter of eligibility of credit on various iron and steel items, railway track material, JO truck were subject of many earlier proceedings and the appellants have orders from the Tribunal admitting their eligibility. Considering these settled issues in favour of the appellant, we find that the impugned orders cannot be sustained. Accordingly, the impugned orders are set aside and the appeals are allowed.
[Order pronounced on 9.11.2016] ( Justice Dr. Satish Chandra) President ( B. Ravichandran ) Member (Technical) Ckp.
1E/56730/2013-EX(DB) & E/56731/2013