Custom, Excise & Service Tax Tribunal
M/S Bell Ceramics Limited vs C.C.E. & S.T.-Vadodara-Ii on 27 July, 2015
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ****
Appeal No : E/1150/2008 Application No : E/MA(Extn)/16828/2014
(Arising out of OIA-COMMR-A-/71/VDR-II/2008 Dated 15/05/2008 passed by Commissioner of Central Exise, Customs and Service Tax-VADODARA-II,) M/s Bell Ceramics Limited : Appellant (s) Vs C.C.E. & S.T.-Vadodara-ii : Respondent (s) Represented by:
For Appellant (s) : Shri Dhaval Shah, Advocate For Respondent (s) : Shri T.K Sikdar, AR For approval and signature: Mr. H.K. Thakur, Honble Member (Technical) 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
CORAM:
MR. H.K. THAKUR, HONBLE MEMBER (TECHNICAL)
Date of Hearing/Decision:27.07.2015
Order No. A/11112 / 2015 Dated 27.07.2015
Per: H.K. Thakur
This appeal has been filed by the appellant against OIA No. Commr.(A)/71/VDR-I/2008 under which CENVAT credit was disallowed to the appellant with respect to duty paid Coated Pipes (capital goods) used as replacements in a pipeline used for transportation of natural gas from Gails take off point to Appellants factory for the manufacture of finished goods.
2. Shri Dhaval Shah (Advocate) appearing on behalf of the appellant argued that first appellate authority has rejected their claim on the grounds that use of the pipes is not in the factory of manufacture as required under CENVAT Credit Rule 2004 (CCR). Learned Advocate relied upon the following case laws to argue that similar credit for pipes used in transporting water to the factory of a manufacturers has been held to be admissible:-
(i) Torrent Pharmaceuticals Ltd. vs Commissioner of Central Excise & Service Tax, Ahmedabad-III [2014-TIOL-2217-CESTAT-AHM]
(ii) Commissioner of Central Excise, Chennai vs Pepsico India Holdings Ltd. [2001 (130) E.L.T. 193 (Tri. Chennai)
(iii) Vikram Cement vs Commissioner of Central Excise Indore [2006 (194) E.L.T. 3 (S.C.)] 2.1 Learned Advocate also relied upon the following case laws to emphasize that use of capital goods away from the factory can also be admissible.
(i) M/s Coromandel Fertilizers Ltd. vs Commissioner of Customs & Central Excise, Visakhapatnam [2007-TIOL-2009-CESTAT-BANG]
(ii) M/s Steel Authority of India Ltd. vs Commissioner of Central Excise, Bhubaneshwar-II [2007-TIOL-438-CESTAT-DEL]
3. Shri T.K. Sikdar (AR) appearing on behalf of the Revenue made the Bench go through case laws relied upon by Commissioner (Appeals) in Para 5.5 of OIA Dated 15.05.2008-13.06.2008. It was his case that inputs/capital goods have to be used only in the factory of manufacture of finished goods to be eligible for CENVAT credit under Cenvat Credit Rule, 2004.
4. Heard both sides and perused the case records. The issue involved in the present appeals is regarding use of pipes in the manufacture of gas pipeline from the unit of the appellant to the supply point of GAIL. From the case law relied upon by the first appellate authority and the Learned Advocate during the course of hearing, it is observed that there were divergent views expressed on the issue. However, CESTAT Ahmedabad in the case of Torrent Pharmaceuticals Ltd. vs Commissioner of Central Excise & Service Tax, Ahmedabad-III (Supra) vide order dated 04.07.2014 held the credit of pipes from bringing water from a far of source to the factory for use in or relation to the manufacture of finished excisable goods as admissible. In Para 8 & 9 of this case law following observations were made by the bench, after relying upon the ratio laid down by Apex Court in the case of Birla Corporation Ltd vs Commissioner of Central Excise, [2005 (186) E.L.T. 266 (S.C.)]:-
8. As regards the Cenvat Credit of the central excise duty paid on pipes, I find that the decision of the Tribunal in the case of CCE, Belgaum Vs. Bellary Steel and Alloys Ltd 2008 (226) ELT 280 (Tri. Bang.) = 2008-TIOL-662-CESTAT-BANG was relying on the judgment of the Tribunal in the case of Commissioner Vs. Pepsico India Holdings Ltd. (supra). The ratio which has been laid down by the Tribunal in the case of Commissioner Vs. Pepsico India Holdings Ltd. (supra) has been approved by the Apex Court in the case of Birla Corporation Ltd. (supra). Their Lordships in the said judgment has held as under:
3. An identical issue came up for consideration before the? CEGAT, in J.K. Udaipur Udyog Ltd. v. CCE, Jaipur-II [2001 (130) E.L.T. 996] = 2002-TIOL-196-CESTAT-DEL. In that case the Tribunal held, following the principles laid down in the case of CCE, Chennai v. Pepsico India Holdings Ltd. [2001 (130) E.L.T. 193] = 2002-TIOL-196-CESTAT-DEL. that the assessee was entitled to the Modvat credit. The Commissioner of Central Excise came up in appeal before this Court in Civil Appeal No. 1129/2003 impugning the aforesaid decision of the CEGAT. However, by order dated July 10, 2003 the appeal was dismissed in view of the fact that the learned Attorney General appearing for the Commissioner of Central Excise stated that he did not wish to press the appeal in view of the letter of the Department dated 5th June, 2003. The aforesaid letter reads as follows:
Please refer to your office letter, dated 2nd May, 2003 on the above cited subject. In this connection it is to inform you that case of CCE, Chennai v. M/s. Pepsico India Holdings Ltd. Reported in 2001 (42) RLT 800 =2002-TIOL-197-CESTAT-MAD, Final order No. 1581/2000 dated 27-10-2000 in appeal No. E/2603/1998/MAS has been accepted as reported by Chief Commissioner, Central Excise, Chennai vide his letter C.No. IV/16/16/2003-CZO, dated 3-6-03. In these circumstances, this Court dismissed the appeal.
4. Learned Counsel appearing on? behalf of the appellant submitted before us that there are several decisions of the Tribunal which have followed the principles laid down in J.K. Udaipur Udyog Ltd. and Pepsico India Holdings Ltd. (supra) and the law is now well settled.
5. In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. (supra) cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary.
6. We, therefore, allow this appeal? and hold that Modvat credit is available to the appellant in the facts and circumstances of the case. This appeal is accordingly allowed. The order of the CEGAT is set aside.
9. It can be seen that the Cenvat Credit which is availved by the appellant in these cases are correctly availed as per the norm laid down by the Honble High Court and the Apex Court, accordingly I find that the impugned orders are liable to be set aside and I do so. The impugned orders are set aside and the appeals are allowed.
5. The facts of this case are similar to the facts involved in the relied upon case laws. Respectfully following the ratio laid down by the relied upon case laws, appeal filed by the appellant is allowed and miscellaneous application filed by the appellant also stand disposed of.
(Operative portion of the order pronounced in Court) (H.K. Thakur) Member (Technical) govind 5