Customs, Excise and Gold Tribunal - Ahmedabad
C.C.E. vs Rohit Pulp And Paper Mills Ltd. on 22 February, 2007
Equivalent citations: 2007(117)ECC87, 2007ECR87(TRI.-AHMEDABAD)
ORDER M. Veeraiyan, Member (T)
1. These two appeals relating to the same respondents involving the same issue for different periods are being disposed of by a common order.
2. Heard both sides.
3. The respondents manufacture paper and paper product and use materials like, metal cloth, industrial cloth, felt, four driner wire cloth, Dandy cover and claimed them as inputs and availed Cenvat credit. The period of dispute involved in the Appeal No. E/1056 of 2000 is February 1992 to November 1992 and the period involved in Appeal No. E/1053 of 2000 is April, 1993 to August, 1993.
4. Show cause notices proposed denial of credit on the ground that these materials have not been used as inputs but they are used only for purposes like cleaning, drying of pulp and therefore, should be treated as part of machinery and not as inputs. During this disputed period, there was no Cenvat credit available for capital goods.
5. Identical issues have been elaborately considered by the Larger Bench of the Tribunal in the case of Union Carbide India Ltd. v. C.C.E., Calcutta I and the relevant portion of the findings is extracted below:
18. (i) Felt, Phospher Bronze Stainless steel wire mesh, in cloth, Dandy cloth etc. Pulp with excess water comes from the pulp making machine to the paper making machine. Pulp is allowed to fall on phospher bronze or stainless steel wire mesh, Pulp particles remain on the wire mesh and web of pulp fibre is formed. It moves on moving wire mesh (endless) and is allowed to fall on felt (cotton, woolen or synthetic). The moving felt carries the pulp web to the drier and is calendared or pressed being wound on rolls and treated further. Wet paper is passed between Dandy Rolls covered with Dandy cover so as to smoothen the surface of the paper. These articles are damaged in the process and require replacement periodically. They are replaceable goods used in the paper making machine in the course of manufacture of paper. They can be regarded in a way, as parts of the paper making machine or machinery used in the machine or for the purpose of the machine; but by their very purpose, they are goods used in relation to the manufacture of paper or paper products and hence are 'inputs' as contemplated in Rule 57A...
The same issues were considered by the Hon'ble Punjab and Haryana High Court in the case of C.C.E., Chandigarh v. Zenith Papers and the relevant findings are as follows:
10. It is not disputed that Wire Mesh and the Synthetic Cloth are used as replaceable goods in the course of manufacture of paper. They are used directly as well as indirectly for the manufacture of the final product. These shall fall within the concept of 'inputs' as contemplated in Rule 57A.
6. Following the ratio of the above decisions I hold that the disputed items are used clearly in relation to manufacture of final product and would qualify to be considered as inputs and eligible for Cenvat credit. I also find that original authority and the Commissioner (Appeals) have relied on the order of the Tribunal in the case of Union Carbide India Ltd. cited supra.
7. In view of the above I do not find any reason to upset the concurrent findings of the adjudicating authority and the Commissioner (Appeals) and accordingly reject the appeals by Department.
(Dictated and pronounced in the open Court)