Custom, Excise & Service Tax Tribunal
M/S Jodhpur Alloys Pvt. Limited vs Cce, Jaipur on 25 February, 2013
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision: 25.02.2013
For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the order for
Publication under 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?
Excise Appeal No. E/963/2011-SM
(Arising out of Order-in-Appeal No.07(CB)CE/JPR-II/2011 dated 10.01.2011 passed by the Commissioner of Central Excise (Appeals), Jaipur).
M/s Jodhpur Alloys Pvt. Limited Appellants
Vs.
CCE, Jaipur Respondent
Appearance:
Ms. Sukriti Das, Advocate for the appellant.
Shri R.K. Mathur, AR for the respondent.
Coram: Honble Shri Rakesh Kumar, Member (Technical) Final Order No.55723/2013 dated 25.02.2013 Per Rakesh Kumar:
The appellant are manufacturers of rolled steel products. Their raw materials are M.S. Ingots. The appellant during the period March, 2007 to April, 2008 took cenvat credit of Rs.1,45,699/- in respect of plates and joists which according to them were used for fabricating cooling beds for the rolling mills. Some of the plates had been purchased from the shipbreakers on which the additional customs duty had been paid and the remaining quantity had been purchased from other manufacturers. The department being of the view that since the plates, joists and channels have been used for fabrication of cooling bed which are ultimately fixed to the earth and, hence are not goods, these items cannot be treated as inputs used in the fabrication of the capital goods and would not be eligible for cenvat credit. Accordingly, a show cause notice dated 14.5.2000 was issued for recovery of the allegedly wrongly availed cenvat credit alongwith interest and imposition of penalty on the appellant. The show cause notice was adjudicated by the Dy. Commissioner vide order-in-original dated 20.1.2010 by which the above mentioned cenvat credit demand was confirmed along with interest and equal amount of penalty was imposed. On appeal to the Commissioner (Appeals), the Dy. Commissioners order was upheld vide order-in-appeal dated 10.01.2011 against which this appeal has been filed.
2. Heard both sides.
3. Ms. Sukriti Das, ld. Counsel for the appellant, pleaded that steel items, in question, had been used for fabrication of the components of capital goods, that part of the steel items were used in the fabrication of the steel bed for rolling mill which are item of the capital goods, that since rolling takes place on the cooling bed, the same has to be treated as component of rolling mill and hence are item of capital goods, that just because for installation of the rolling mill, the cooling bed has to be fixed to the earth, the cooling bed would not cease to be the component of rolling mills, that in view of this, denial of cenvat credit in respect of the steal plates, joists, and channels used in the fabrication of the cooling bed is not correct, that part of these items had been used for fabrication of the induction furnace and in respect of this use, these items must be treated as inputs and hence eligible for cenvat credit, and that in view of the above submissions, denial of cenvat credit is not correct. In support of her contention, she relied upon the judgment of the Apex Court in the case of CCE, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. reported in 2010 (255) ELT 481 (SC), the judgment of Honble Chattisgarh High Court in the case of Union of India Vs. Associated Cement Company Ltd. reported in 2011 (267) ELT 55 (Chhattisgarh), judgment of Honble Madras High Court in case of CCE, Tiruchirapalli Vs. India Cements Ltd. reported in 2012 (285) ELT 341 (Mad.), judgment of the Tribunal in the case of ISPAT Industries Ltd. Vs. CCE, Mumbai reported in 2006 (195) ELT 164 (Tribunal-Mumbai) and also the judgment of the Tribunal in the case of CCE, Visakhapatnam-II Vs. M/s. APP Mills Ltd. reported in 2011-TIOL-1378-CESTAT-BANG. She also pleaded that the demand is time barred as the availment of the cenvat credit had been declared in the ER-I Returns and the availment had been detected in the course of audit of the central excise records, which has been presented to the auditors by the appellant and hence the appellant cannot be accused of wilful suppression of relevant information in this regard. In this regard she relied upon the judgments of the Apex Court in the case of Continental Foundation Jt. Venture Vs. CCE, Chandigarh reported in 2007 (216) ELT 177 (SC) and also the judgment of the Apex Court in the case of Jaiprakash Industries Ltd. Vs. CCE, Chandigarh reported in 2002 (146) ELT 481 (SC). In view of the above, she pleaded that the impugned order is not sustainable.
4. Shri R.K. Mathur, ld. Departmental Representative pleaded that, admittedly, the appellant have used the steel items, in question, for fabrication of cooling bed which is a structure permanently attached to the earth, that when the cooling bed is permanently attached to the earth, the same is not excisable, and the steel plates, channels and joists used for the fabrication of cooling bed would not be eligible for cenvat credit. In this regard he relies upon the Larger Bench judgment in the case of Vandana Global Ltd. reported in 2010 (253) ELT 440 (T-LB) or 2009 (238) ELT 420 (T-LB). He further pleaded that the appellant neither in the ER-I Returns nor by any other communication had disclosed the use of the steel items in question and, therefore, they have suppressed the relevant facts from the department and, hence, longer limitation period has been correctly invoked.
5. I have considered the submissions from both the sides and perused the records.
6. The steel items, in question, as per the facts narrated in the show cause notice and in the order passed by the original adjudicating authority, have been used in fabrication of steel bed of the rolling mill on which the rolling takes place. There is also no dispute that the steel bed has to be permanently fixed to the earth. However, the rolling mill is covered by the Chapter heading 84.55 therefore, would be covered by the definition of capital goods as given in Rule 2 (a) of the Cenvat Credit Rules. In my view since it is the cooling bed on which the rolling takes place, the same has to be treated as a component of the rolling mill, even though for installation of the rolling mill, the cooling bed has to be permanently fixed to the earth. Looked at from this angle, the steel items in question, which admittedly have been used in fabrication of the cooling bed, have to be treated as input having been used in fabrication of the components of rolling mills, which are covered by the definition of capital goods and, therefore, the same would be eligible for cenvat credit, as the definition of input in Rule 2 (k) also covers the inputs used for fabrication of capital goods for use in the factory. I find that the Honble Chhattisgarh High Court in the case of Union of India Vs. Associated Cement Company Ltd. has allowed the cenvat credit in respect of the wear plate, HRSS plate, M.S. Plate, angles and channels, which were used for fabrication of casing and ducting of the kilns, which is used for manufacture of clinker in the cement plant.
7. In view of the above discussion, the impugned order is not sustainable. The same is set aside. The appeal is allowed.
(Rakesh Kumar) Member (Technical) Ckp.
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