Custom, Excise & Service Tax Tribunal
Cce, Belgaum vs M/S. Vishwanatha Sugars Ltd on 11 May, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - SMB
Court I
Date of Hearing:11/05/2012
Date of decision:11/05/2012
Appeal No.E/1703/2010
(Arising out of Order-in-Appeal No.189/2010 dt. 22/06/2010
passed by CCE(Appeals), Mangalore)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
CCE, Belgaum
..Appellant(s)
Vs.
M/s. Vishwanatha Sugars Ltd.
..Respondent(s)
Appearance Ms. Sabrina Cano, Superintendent(AR) for the Revenue.
Mr. M.A. Nyalkalkar, Advocate for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) FINAL ORDER No._______________________ In adjudication of a show-cause notice dt. 07/09/2007, the original authority had denied CENVAT credit of Rs.2,38,537/- to the assessee and appropriated an amount of Rs.1,49,786/- towards the demand. Neither any interest on duty was demanded, nor any penalty imposed by that authority. Aggrieved by the denial of CENVAT credit to the extent of Rs.88,751/-, the assessee preferred an appeal to the Commissioner(Appeals) and the latter allowed the appeal. The appellate authority relied on its own earlier order No.246/2008 dt. 12/11/2008 which was passed in another assessees case. It also relied on a decision of this Tribunal U.P. State Sugar Corporation vs. CCE, Meerut [2007(215) ELT 111 (Tri. Delhi)]. Its decision was also based on a certificate/statement of the Chief Engineer of the assessee-company.
2. In the present appeal filed by the Department against the appellate Commissioners order, the main grounds are to the effect (a) that Order-in-Appeal No.246/2008 was not accepted by the Department and an appeal has been preferred to this Tribunal, (b) that, in any case, the facts of the said Order-in-Appeal are distinguishable from the facts of the instant case, (c) that the sugar silos and weighbridge manufactured by the respondent are non-excisable goods in terms of Boards Circular No.58/1/2002-CX dt. 15/1/2002 (issued under Section 37B of the Central Excise Act) and therefore the structurals used for the purpose are not CENVATable, (d) that the structurals viz. MS angles, Channels, HR coils etc. on which CENVAT credit was availed by the respondent are classifiable under Chapter 72 of the CETA Schedule, (e) that the assessee did not satisfy the original authority in the manner required by the Supreme Court in its judgment dt. 06/05/2010 in Civil Appeal No.2037 of 2006 and Civil Appeal No.7443 of 2008 (Madras Cements Ltd. vs. CCE).
3. The learned Superintendent(AR), apart from the above grounds of this appeal, points out that the reliance placed by the lower appellate authority on the Chief Engineers certificate/statement is questionable. I have heard the learned counsel for the respondent also. After considering the submissions, I find that the present dispute is in relation to the CENVAT credit of Rs.88,751/- availed by the respondent in respect of the structural items used for the fabrication of sugar silos and weighbridge. I find that the Chief Engineers statement, which was also signed by the Managing Director of the company was relied upon in the show-cause notice. I have perused this statement and have found that a variety of machinery was shown, in this statement, to have been manufactured/fabricated out of a variety of structurals viz. MS angles, channels, beams, rods, joists, HR plates, coils etc. One item mentioned in the end-use column of this statement is sugar godown. Another item is electricity transmission line. A third item is molasses tank. Presumably, after noting these items, the show-cause notice alleged that the assessee was using the structurals in civil construction work and in the fabrication of platforms and other support structures for various items of plant and machinery and also in the fabrication of transmission lines. On a perusal of the annexure to show-cause notice, I find that total credit of Rs.47,981/- was shown to have been taken on HR coils covered by three invoices, Nos.201, 209 and 210 dt. 08/09/2006. The same set of invoices are seen mentioned in the Chief Engineers statement which indicates that the HR coils covered by the invoices were used in the fabrication of sugar silos. Further, it is noted that the CENVAT credit of Rs.30,204/- was shown in the annexure to the show-cause notice as having been taken on structurals covered by three invoices vide No.2089 and 2378 dt. 19/02/2007 and No.2113 dt. 20/02/2007. The same set of invoices and the same structural items are seen stated in the Chief Engineers statement which also indicates the end-use as sugar silos. The total credit, for which there is total match between the show-cause notice and the Chief Engineers statement is Rs.76,662/-. As the respondent also relied on Chief Engineers statement, on which the Department relied for issuing the show-cause notice, the benefit of CENVAT credit to this extent is not deniable to the respondent. Yet another set of three invoices mentioned in the annexure to the show-cause notice as well as in the Chief Engineers statement accounts for CENVAT credit of Rs.10,350/-. The show-cause notice denied this credit to the assessee on the ground that structurals covered by the three invoices were used in the fabrication of structures which came to be embeded in earth and became non-excisable. These invoices are No.421 to 423 dt. 07/12/2006. In respect of these invoices, there is no mention of the structural items in the annexure to the show-cause notice, nor anything about the machinery fabricated/manufactured out of the structural items. However, the Chief Engineers statement specifies the structural items and also states that these were used in the fabrication of weighbridge. There is no evidence to show that the weighbridge fabricated out of the structural items covered by the above three invoices is located within the factory premises of the respondent. If that be so, the structural items in question cannot be held to have been used within the factory of the respondent and consequently cannot be treated as CENVATable capital goods. In other words, the denial of credit of Rs.10,350/- by the original authority is in order.
4. Apparently, the Tribunals decision in UP State Sugar Corporation case covers a factually distinguishable case. The appellant states that the case relates to welding electrodes used in the repairs and maintenance of storage tanks and weighbridge. This statement has not been disputed. However, the Tribunals decision in UP State Sugar Corporation case, which is based mainly on a certificate of the Chief Engineer of the assessee, is in support of the respondent. In that case, it was held that the Chief Engineers certificate was not controverted by the lower appellate authority. In the instant case, similar certificate/statement of the Chief Engineer was relied on in the show-cause notice and has also been relied on by the lower appellate authority. I have also perused that statement and have recorded my findings after comparing it with the annexure to the show-cause notice. Therefore, the ground raised in the present appeal with reference to the Chief Engineers statement is untenable. The appellant cannot approbate and reprobate with regard to the Chief Engineers statement.
5. In the result, the impugned order is sustained to the limited extent of grant of CENVAT credit of Rs.78,185/- which was availed by the respondent on the following invoices viz. No.201, 209 and 210 dt. 08/09/2006, No.2089 & 2378 dt. 19/02/2007 and No.2113 dt. 20/02/2007. Any further CENVAT Credit allowed by the Commissioner(Appeals) shall stand denied to the respondent. The original authority is directed to make correct quantification of the credit allowed in this order. The matter is sent back to the original authority for this limited purpose. The credit so quantified by the original authority shall be recovered from the respondent without interest or penalty.
6. The appeal is disposed of in the above terms.
( Pronounced and dictated in open court ) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 7