Custom, Excise & Service Tax Tribunal
M/S. Andhra Cements Ltd vs Cc,Ce&St, Guntur on 29 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/26419/2013 (Arising out of Order-in-Appeal No.07/2013(G)CE dt. 07/03/2013 passed by CC,CE&ST(Appeals), Guntur) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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? M/s. Andhra Cements Ltd. ..Appellant(s) Vs. CC,CE&ST, Guntur ..Respondent(s)
Appearance Shri G. Prahlad, Advocate for the appellant.
Shri Deepak, Authorised representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:29/01/2016 Date of decision:29/01/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The issue that arises for consideration is whether credit is admissible on welding electrodes and gases under the category inputs.
2. The Commissioner(Appeals) in the impugned order held that welding electrodes and gases were used for the purpose of welding/repair only, and not for manufacture of final products. That therefore these are consumable items which lose their identity and existence on their use and therefore credit is not admissible.
3. The appellants are engaged in manufacture and clearance of cement and clinker and are also availing CENVAT facility on inputs and capital goods. A show-cause notice was served alleging wrong availment of credit on welding electrodes and gases under the category of inputs. After due process of law, the original authority confirmed the demand along with interest and imposed equal amount of penalty. In appeal, the Commissioner(Appeals) observed as stated above, and disallowed the credit upholding the demand, interest and penalty. Being aggrieved the appellants are now before the Tribunal.
4. The learned counsel for the appellant submitted both on the issue of limitation as well as on merits. That the show-cause notice is based on the ER-1 return filed by appellants and that therefore there is no suppression on the part of the appellant. Further that there were several decisions which held that credit on welding electrodes and gases is admissible and that therefore appellants were under the bona fide belief that they were eligible for credit. That in such circumstances the demand raised invoking extended period is not sustainable. In addition, it is submitted that in the appellants own case for earlier period, CCE&C, Guntur Vs. Andhra Cements Ltd. [2009(247) ELT 651 (Tri. Bang.)] the CESTAT has held the issue in favour of appellants. The Tribunal in the said case observed that from the definition of inputs, it is very clear that a manufacturer is entitled to CENVAT credit in respect of inputs or capital goods received in the factory of manufacture of final products used directly or indirectly in relation to manufacture of final products within the factory of production. The definition is very wide to cover even maintenance and repair. Together with this view, it has also to be considered that without repair and maintenance of plant and machinery which is definitely to undergo wear and tear, the manufacture of final products is not commercially feasible. In Kisan Co-Operative Sugar Factory Ltd. Vs. CCE, Meerut [2013(296) ELT 523 (Tri. Del.)], the Tribunal considered the various judgements and held the issue in favour of assessee. This view has been followed in West Coast Paper Mills Ltd. case [Final Order No.21052-21053/2015 dt. 01/05/2015]. Following the decision in the appellants own case as well as the judgments cited supra, I hold that credit on welding electrodes and gases is admissible.
5. In the result, the impugned order is set aside and the appeal is allowed with consequential reliefs, if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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