Custom, Excise & Service Tax Tribunal
Cce & Cst, Raipur vs M/S. Topworth Steels Pvt.Ltd on 10 September, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Court No.III
Appeal No. E/54309/2014-ST-SM
(Arising out of OIA No.41/RPR-II/2014 dt.30.4.14 passed by CCE(A), Raipur)
Date of Hearing/Decision: 10.09.2015
For approval & Signature:
Honble Smt.Sulekha Beevi C.S., Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
CCE & CST, Raipur Appellant
Vs.
M/s. Topworth Steels Pvt.Ltd. Respondent
Appearance:
Present for the Appellant: Shri M.R.Sharma, DR Present for the Respondent: Shri A.Jaju, Advocate Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial) Final Order No.52843/2015 Per: Sulekha Beevi C.S. Revenue is in appeal challenging the impugned order which allowed credit.
2. The respondents are engaged in the manufacture of sponge iron and are holding Central Excise registration. For the period April,2009 to December, 2009 it was observed by the Department that the respondent wrongly availed credit on the goods falling under chapter 72 and 73, namely, Plates, M.S.Rounds, Castings, Wire Rope etc. besides other goods like Oxygen Gas, Welding Electrodes, LPG Gas etc. falling under other chapters. A show cause notice issued alleging the same. The adjudicating authority disallowed credit of Rs.16,45,377/- and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) allowed the credit. on these items. Aggrieved, the Revenue is before the Tribunal.
3. On behalf of the Revenue, the first ground raised is that the above goods being structural items, they have been used by the respondent for manufacture of supporting structure of capital goods and therefore these are not eligible for credit. Second ground raised is that the respondent failed to declare the manufacture of such goods in ER-1 returns and thereby suppressed the fact of such use of structural steel items in their factory. Per contra, the impugned order was justified by the respondents and also placed reliance on the decision rendered in M/s.India Cements Ltd. Vs. CCE, Chennai-2015-TIOL-650-HC-MAD-CX.
4. The first contention of the Revenue is that these items do not fall in the definition of input as given in the Rule 2(k) of Cenvat Credit Rules, 2004. The Revenue contends that these items, namely, Plates, M.S.Rounds, Castings, Wire Rope etc. are neither inputs nor capital goods and therefore the credit cannot be allowed. On the other hand, the respondents defended the impugned order which allowed credit on the ground that inputs have been used for manufacture of capital goods like furnace oil tank, overhead tank, mills stands, ESP and various parts of ESP etc. which fall under chapter 84 and 73 of CETA, 1985 and other capital goods. In support of their contention, the respondent has furnished certificate of chartered engineer where it has been certified that these items have been used for manufacture of capital goods. The Commissioner (Appeals) after perusing the certificate and following the ratio of decision laid in various decisions has come to the conclusion that credit is admissible on these items. In para 8 of the impugned order, the Commissioner (Appeals) has observed as under:-
in support of above findings no evidence have been adduced by the revenue that such items were used for manufacture of supporting structure of capital goods whereas the appellant in support of their claim that these impugned goods have been used for manufacture of capital goods/parts/components had furnished sufficient and convincing documentary evidences such as certificate issued by Chartered Engineer, photograph of capital goods, Records showing the capitalization of said capital goods, usage of capital goods manufactured and quantification of inputs used for manufacture of said capital goods etc. Hence taking into consideration all the above evidences I am inclined to accept the contention of the appellant that these impugned goods have not been used for fabrication/manufacture of supporting structure but used for the manufacture of capital goods as defined under Rule 2 (a) of Cenvat Credit Rules, 2004 and therefore eligible for Cenvat Credit.
5. Second allegation is that the respondent did not disclose such manufacture of capital goods using the above inputs in their ER-1 return. The Commissioner (Appeals) after taking note of this has held that to establish the use of these inputs in manufacture of capital goods, the respondent furnished the copies of fixed assets Register showing the description of capital goods manufactured by them out of the said inputs. Even if the same was not stated in the ER-1 return it was only a procedural lapse. The Commissioner (Appeals) observed that the credit cannot be denied merely on technical lapses. Moreover in India Cements Ltd. Case (supra), the Honble Madras High Court has held that credit is admissible on MS sheets, channels, and plates used for fabrication/manufacture of capital goods. The revenue has not been able to establish that the inputs were diverted by the respondent in any manner. So also it is not established that the inputs were used for supporting structure or laying foundation. In the circumstances, applying the ratio of the above judgement, I am of the view that the impugned order passed calls for no interference.
6. In the result the appeal is dismissed.
(pronounced in the open court) (Sulekha Beevi C.S.) Member (Judicial) mk 4