Custom, Excise & Service Tax Tribunal
M/S Grey Gold Cements Ltd vs The Commissioner on 17 December, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court II Appeal No.E/464/2012 (Arising out of Order-in-Appeal No. 97/2011(H-III)CE, dated 31-10-2011 Passed by C.C.C.E&ST(Appeals). Hyderabad-III ) For approval and signature: Honble Ms.Sulekha Beevi C.S. Judicial Member 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 Grey Gold Cements Ltd. Nalgonda District ..Appellant(s) Vs. The Commissioner, C.C.E&S.T, Hyderabad-III ..Respondent(s)
Appearance Shri V.J.Sankaram, Advocate for Appellant Shri R.K.Das, AR for respondent Coram:
Honble Ms.Sulekha Beevi C.S. Judicial Member Date of Hearing: 17/12/2015 Date of Decision:17/12/2015 FINAL ORDER No._______________________ [Order per: Ms.Sulekha Beevi ,C.S]
1. The appellants are engaged in manufacture of cement and clinker and are holders of Central Excise registration. They are also availing Cenvat Credit on the duty paid on inputs, capital goods. During the course of audit it was observed that appellants had availed credit on M.S.Items( viz. Angles, channels, plates, sheets, coil, round etc) as inputs used for fabrication/manufacture of capital goods and under the category of capital goods. The department was of the view that these were used for construction of structures and was in no way used in or in relation to manufacture of final product. That these items therefore cannot be considered as inputs used for manufacture of capital goods. Similarly, the M.S.material used for supporting the capital goods do not constitute capital goods or parts/accessories of capital goods. A show cause notice raising the above allegation was issued to the appellants. After adjudication the original authority confirmed the disallowances of credit and ordered recovery of the same along with interest and imposed equal amount of penalty. The appellants preferred appeal before the Commissioner (Appeal) who upheld the same. Being aggrieved, the appellants are before me.
2. The issue involved is whether the appellants are eligible to avail credit of M.S.items. It is submitted by the learned Counsel for the appellant that these M.S.items were used in the factory for fabrication of raw mill part, pre-heater ducts, clinker cool part, cement mill parts, belt conveyors which constitute basic part of the cement plant. It is urged by the Counsel that there is no embargo for utilizing credit of duty paid on inputs like M.S.Plates, angles, channels, beams etc,. which are used for positioning the machinery and for supporting ancillary and /or auxiliary equipment/machinery and that these items qualify as components spares and accessories of capital goods. Further, that appellants produced certificate issued by chartered engineer in regard to the usage of M.S.Material. The Learned Counsel placed reliance on the judgment rendered in Mundra Ports and Special economic Zone Ltd. Vs CCE 2015, TIOL-1288 HC- Ahm.-ST and India cements Ltd Vs CESTAT Chennai 2015(321) ELT 209(Mad).
3. Per Contra, the Learned AR Shri R.K.Das vehemently argued that MS items were used by appellants as structural support and that therefore, the credit is not admissible. He reiterated the findings in the impugned order and argued that the impugned order calls for no interference.
4. I have heard the submissions made by either side and perused the appeal papers.
5. The appellants have furnished the Chartered Engineers Certificate to prove the method and manner in which the impugned items were used. It also shows how these goods are used by appellants in or in relation to manufacture of cement and also states that in the absence of these items being used in the manner they were employed, it would not be possible to manufacture the cement and clinker. The very same issue came up for consideration before the Honble High Court of Madras in India cements Ltd Vs CESTAT Chennai. 2015(321) ELT 209(Mad) and the Honble Court has held that credit is admissible. The facts of the present case being identical, the ratio laid in the above judgment is squarely applicable. In view thereof, I hold that the impugned order is not sustainable.
6. In the result, the impugned order is set aside and appeal is allowed with consequential relief, if any.
(Pronounced in open court) (Ms.Sulekha Beevi ,C.S) Judicial Member DKS 4