Custom, Excise & Service Tax Tribunal
M/S. Vandana Global Ltd vs C.C.E., Raipur on 26 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT III
Excise Appeal No.E/1144/2011-EX [SM]
[Arising out of Order-in-Appeal No.34/RPR-I/2011 dated 25.02.2011 passed by the Commissioner (Appeals-I), Customs, Central Excise and Service Tax, Raipur]
For approval and signature:
HONBLE MR. S.K. MOHANTY, 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 Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Vandana Global Ltd. Appellant
Vs.
C.C.E., Raipur Respondent
Present for the Appellant : Ms. Sukriti Das, Advocate Present for the Respondent: Mr.G.R.Singh, D.R. Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) Date of Hearing/Decision: 26.09.2016 FINAL ORDER NO. _555738/2016_ PER: S.K. MOHANTY
Brief facts of the case are that the appellant is engaged in manufacture of Sponge Iron, Steel Ingot and Steel Billets, falling under Chapter 72 of the Central Excise Tariff Act, 1985. The appellant purchased various steel items namely, MS Channels, Beams, Joists, rounds, sheets, angle, plates etc. for fabrication and erection of various technological structures and also oxygen gas, welding electrodes for repair and maintenance of plant and machineries falling under Chapter 84 of the Tariff Act. Central Excise duty paid on the steel items was taken as cenvat credit by the appellant. Relying on the Larger Bench decision of the Tribunal in the case of Vandana Global Ltd. vs. CCE reported in 2010 (253) ELT 440 (Tri.- LB)the Department raised the objection that the appellant is nto entitled for the cenvat benefit on the above mentioned goods. The dispute was adjudicated by the Order dated 18.10.2010, wherein the Additional Commissioner of Central Excise disallowed Cenvat Credit of Rs.16,01,142/- and imposed equal amount of penalty on the appellant. In appeal, the ld. Commissioner (Appeals) vide the impugned order dated 25.02.2011 has upheld the adjudication order. Hence, the appellant is before this Tribunal.
2. Ms. Sukriti Das the ld. Advocate appearing for the appellant submits that the period of dispute in this case is from July, 2008 to July, 2009 and the steel structural items were used in the factory prior to July, 2009. She further submits that as per Explanation 2 appended to the definition of input, the disputed goods in question should merit classification as input, since the same were used in the manufacture of capital goods, which were further used in the factory of the manufacturer. It is her submission that the amendment to the definition of input took take place on 07.07.2009 should not be applicable to the case of the appellant inasmuch as, the cenvat credit was taken by the appellant prior to the date of amendment of the definition of input. To justify her stand that the amended definition of input is not applicable to the case of the appellant, the ld. Advocate has relied on the judgment of Honble Gujarat High Court in the case of Mundra Ports and Special Economic Zone Ltd. Vs. Commissioner of Central Excise and Customs reported in 2015 TIOL 1288 (HC) (Ahm.) ST and also the decision of the Tribunal in the case of M/s. Singhal Enterprises Pvt. Ltd. Vs. CC & CE, Raipur reported in 2016-TIOL-2451-CESTAT-DEL. and M/s. Topworth Steels and Powers Pvt. Ltd. vs. CCE, Raipur reported in 2016-TIOL-2389-CESTAT-DEL,. The Ld. Advocate further submits that the Oxygen Gas, Arzan gas and welding electrodes were used for repair and maintenance of the capital goods installed in the factory and the credit should be available in view of the decision of Honble Chattisgarh High Court in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur, reported in 2010 (256) ELT 690 (Chattisgarh).
3. Shri G.R. Singh, the ld. D.R. for Revenue, on the other hand, reiterates the findings recorded in the impugned order and also relies on the judgment of Honble Allahabad High Court in the case of Daya Sugar Vs. CCE, Meerut reported in 2015 (316) ELT 394 (All.) to state Central Excise duty Paid on the disputed goods would not be available for cenvat credit to the appellant.
4. I have heard the ld. Counsel for both sides and examined the case records.
5. The period involved in this case is from July, 2008 to July, 2009 and the disputed steel items were used by the appellant prior to July, 2009, which is evident from the letter dated 27.08.2009 addressed by the appellant to the Jurisdictional Range Superintendent. Explanation-2 appended to the definition of input takes within its ambit the goods used in the manufacture of capital goods, which are further used in the factory of the manufacturer. The definition of input was amended on 07.07.2009 vide Notification No.16/2009-CE (NT), providing for the goods, namely, cement, angles, channels .CTD or TMT bars and other items used for construction of factory shed/ building or laying of foundation or making of structure for support of capital goods for not consideration as input. I find that the Department has mainly proceeded against the appellant for denial of cenvat benefit, relying on the amended provisions of the definition of input and also the decision of the Larger Bench of the Tribunal in the case of Vandana Global Pvt. Ltd. (supra). In this context, I find that the Honble Gujrat High Court, in the case of Mundra Ports and Special Economic Zone Ltd. (supra) have held that insertion of Explanation-2 on 07.07.2009 should have the prospective effect and it cannot be applied retrospectively to deny the cenvat benefit. The relevant paragraph in the said judgment is extracted herein below.
We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 07.07.2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and / or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Corut in Sangam Spinners Limited vs. Union of India and Others reported in (2011) 11 SCC 408 = 2011-|TIOL-31-SC-CX would not be applicable to the facts of the instant case
6. Further, I also find that relying on the aforementioned judgment of Honble Gujarat High Court, this Tribunal in the cases of M/s. Singhal Enterprises Pvt. Ltd. V. CC & CE, Raipur reported in 2016-TIOL-2451-CESTAT-EEL. , M/s. Topworth Steels and Powers Pvt. Ltd. vs. CCE, Raipur reported in 2016-TIOL-2389-CESTAT-EEL, Monnet Ispat & Energy Ltd. vs. CCE, Raipur reported in 2015 (230) ELT 771 (Tri.-Del.) has allowed the cenvat benefit on the disputed steel items. I also find that the Honble Chattisgarh High court in the case of Ambuja Cements Eastern Ltd. have allowed cenvat benefit on Oxygen / Arzan gas and welding electrodes used for repair and maintenance of plant and machineries. Further, this Tribunal in the case of Singhal Enterprises Pvt. Ltd (supra) and M/s. Topworth Steels and Powers Pvt. Ltd. has also allowed the cenvat benefit on Oxygen gas and welding electrodes used within the factory for repair and maintenance of the machines/machineries.
7. In view of the settled position of law, I do not find any merits in the impugned order and allow the appeal in favour of the appellant. The Cross Objection filed by the Revenue is also disposed of.
[Dictated and pronounced in the open Court) (S.K. MOHANTY) MEMBER (JUDICIAL) Anita 0 2