Customs, Excise and Gold Tribunal - Tamil Nadu
India Cements Ltd. vs Cce [Alongwith Appeal No. ... on 11 April, 2003
Equivalent citations: 2003(88)ECC345
JUDGMENT S.L. Peeran, Member (J)
1. Since common issue is involved in all these appeals relating to availing of Modvat credit on capital goods, hence all these appeals are taken up together for final disposal with the consent of both sides.
I. E/3536/98/MAS In this appeal the appellants are aggrieved with the Order-in-Appeal No. 125/98 (CBE) (D) dt. 29.9.1998 by which the Commissioner (Appeals) has rejected the prayer for grant of Modvat credit on Capital goods used in the mining operation. He has concluded that the essential requirements of availing the credit of duty on the capital goods is that the Capital goods are used by the manufacturer in his factory for the manufacture of final products. He has held that the capital goods used in the mines are not used in the factory of manufacture as the mines and factories are two different premises.
2. I have heard Ld. Consultant Shri Kuppuswamy, for the appellants and Ld. DR, Shri P. Devaludu, for the Revenue, Ld. DR submits that this very issue came up for consideration in the appellant's own case and the Bench in its Final Order No. 57 to 64/2003 dt. 23.1.2003 upheld the department's view that Modvat credit cannot be extended to Capital goods which are not used within the factory premises. In this regard, the Bench has relied upon the Apex Court judgment in the case of Jaypee Rewa Cements, 2001 (77) ECC457(SC); 2001 (133) ELT 3(SC). Therefore there is no merit in the appeal and the same is required to be rejected. Ld. Consultant submitted that capital goods used in the mines for carrying lime stone which is used in the manufacture of final product viz. Cement in the appellants' factory. Therefore, the benefit is required to be extended.
3. I have heard both sides. On a careful consideration I notice that this Bench has already taken a view in Final Order No. 57 to 64/2003 dt. 23.1.2003 that the benefit of Modvat credit cannot be extended to Capital goods which are used in the mines and not in the factory of the appellants. The view has been expressed in the light of the Apex Court judgment rendered in the case of Jaypee Rewa Cements (supra). Respectfully following the citations the appeal is rejected.
II. E/754/99/MAS. E/767/99/MAS & E/401/01 /MAS In all these three appeals, the issue is common inasmuch as that the authorities have denied the Modvat credit on capital goods utilised in the mines and not in the factory of the appellants. Ld. Commissioner (Appeals) has given a detailed findings on each of the items which were utilised in the mines and have not been utilised in the factory of the premises of the appellants and for the manufacture of final products cleared from the factory. In view of the decision rendered supra, that Modvat credit benefit cannot be granted to capital goods used in mines, the appeals of the appellants on this issue are rejected. However, in Appeal No. E/754/99/MAS arising out of Order-in-Appeal No. 22/99-MDU dt. 5.1.1998 the appellants have availed Modvat credit on invoices issued by IOC pertaining to Servo-multi, servoprem and Hydrx-100, the Commissioner (Appeals) has noted that the appellants have taken credit on the documents wherein it was mentioned "Not applicable". He also noted that the appellants did not produce valid duty paying documents showing the payment of excise duty. Ld. Consultant submits that the duty paying documents were valid documents and only the particulars required are to be verified. He submits that in a similar matter of RS Industries (RM) Ltd. v. CCE, Jaipur, 2002 (147) ELT 306 (T) the Tribunal has remanded the matter for de novo consideration with the direction to the authorities to verify the documents and pass fresh order. He submits in the present case the documents were issued by IOC, a Public Sector Undertaking, and all details were available except for a few remarks, and that they are not disentitled from taking the credit.
2. Ld. DR reiterates the findings recorded in the appeal memo.
3. On a careful consideration, I notice that the Tribunal in the case of R.S. Industries (RM) Ltd. v. CCE, Jaipur, 2002 (147) ELT 205 (T) remanded the matter for denovo consideration on the ground that the documents issued by IOC were proper documents and the particulars are required to be verified. The same situation has arisen in this case and, therefore, I allow the appeal only on this aspect by remanding the same with a direction to the original authority to re-consider the appellants plea pertaining to the documents on the above three products. Insofar as the appellants plea pertaining to the grant of Modvat credit on capital goods utilised in the mines are concerned, there is no merit in their plea. Therefore, respectfully following the citations referred to above, the appeals to that extent are rejected.
III.E/331/2002/MAS The Revenue is aggrieved with the order of the Commissioner (Appeals) passed in Order-in-Appeal No. 15/2002 dt. 8.2.2002 wherein he has held that Modvat credit is required to be extended to M.S. Plates to be treated as Capital goods has denied under Rule 57-Q CE Rules. In the findings recorded by him is in terms of the judgment rendered by the Tribunal the Apex Court findings are noted herein.
"In a similar appeal in the case of "Simbholi Sugar Mills ltd. v. Commissioner ", 2001 (135) ELT 1239 (Tri-Del) the Hon'ble CEGAT has held in its Order No. A276/2000 dt. 16.2.2000, that duty paid on items viz. Joints, Channels, Angles, Rolled and SS Welded tubes and Chequered plates and ITR Plate would be eligible for Modvat credit as Capital goods under the erstwhile Rule 57-Q of CE Rules, 1944. When the decision was challenged by the Department the Hon'ble Supreme Court has dismissed the Revenue appeal and upheld the CEGAT's order on merits.
Applying the same ratio, I set aside the impugned order and allow the appeal by extending Modvat credit on the capital goods concerned."
Revenue contends that MS Plates cannot be considered as Capital goods as it is structural elements, parts or components or accessories of such specified goods and that are not covered within the definition of capital goods.
4. I have heard both sides in the matter and note that the Commissioner (Appeals) has rightly followed the judgments rendered in the case of Simbholi Sugar Mills Ltd. (supra). He has also noted several other judgments in the preceding paragraph which are relevant to the facts of the case. In view of the settled position of the law, there is no merit in this appeal and hence it is rejected.
IV.E/334/2002/MAS The appellants are aggrieved with the Order-in-Appeal No. 16/2002-TRY (PNV) dt. 8.3.2002 that a portion of the Commissioner (Appeals) Order No. 16/2002 dt. 8.3.2002 by which he has denied Modvat credit on Transformer oil while he has allowed credit on M.S. Channels, M.S. angles and CNN Channels.
2. I have heard both sides in the matter. In the appeals, the appellants contends that the Transformer Oil is a lubricant and as a result the lubricant oil is entitled to the Modvat credit in the light of Tribunal judgment in the case of HEG Ltd. v. CCE, Indore, 2001 (127) ELT 235 (T). Ld. DR reiterates the department findings. On a careful consideration, I notice that the Tribunal has granted the benefit on transformer oil which is used as lubricant. Respectfully following the decision of the Tribunal referred to above, I set aside the impugned order on this issue and allow this appeal.