Custom, Excise & Service Tax Tribunal
M/S. Sree Rayalseema Sugar & Energy Pvt. ... vs Cc,Ce&St, Tirupati on 21 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/2982/2012 (Arising out of Order-in-Appeal No.47/2012(T)(CE) dt. 25/07/2012 passed by CC,CE&ST(Appeals), Guntur) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Sree Rayalseema Sugar & Energy Pvt. Ltd. ..Appellant(s) Vs. CC,CE&ST, Tirupati ..Respondent(s)
Appearance Shri B. Venugopal, Advocate for the appellant.
Shri R.K. Dass, Authorised representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:21/01/2016 Date of decision:21/01/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The issue involved in this appeal is whether credit availed on the duty paid on MS angles, channels, beams, HR plates, coils, steel tubes etc. is admissible or not.
2. The appellants are manufacturers of sugar and molasses and are registered with the Central Excise Department. They are also availing credit on inputs and capital goods. On scrutiny of ER-I returns it was observed that appellants had taken credit on steel items such as MS angles, MS channels, HR plates, alloy tubes etc. under the category of inputs. These were used for supporting structure, platforms for the equipments and interconnecting pipelines to the equipment like evaporators, sugar melting system etc. the department entertained the view that credit is not admissible. A show-cause notice was issued proposing to disallow the credit and demand recovery along with interest and to impose penalty. After due process of law, the original authority confirmed the demand of irregularly availed CENVAT credit of Rs.3,10,621/- along with interest and imposed penalty of Rs.50,000/-. In appeal, the Commissioner(Appeals) upheld the same. Being aggrieved the appellants have preferred this appeal.
3. The learned counsel Shri B. Venugopal appearing for the appellant submitted that the MS items were used for fabrication of supporting structures, platform for equipments and fabrication of capital goods which are integral part of the factory. The appellants in their letter dt. 11/02/2009 has explained the usage of these items. That without such support structures, the capital goods could not function and consequently final goods could not be manufactured. To fortify his arguments, the learned counsel placed reliance on the following judgments:-
1. Divis Laboratories Ltd. Vs. CCE, Visakhapatnam [2006(196) ELT 285 (Tri. Bang.)]
2. India Cements Ltd. Vs. CESTAT, Chennai [2015(321) ELT 209 (Mad.)]
3. Mundra Ports & SEZ Ltd. Vs. CCE&Cus [2015(39) STR 726 (Guj.)],
4. Sai Sahmita Storages (P) Ltd.
[2011-TIOL-863-HC-AP-CX]
4. Against this, the learned AR Shri R.K. Dass strongly argued that credit is not admissible. The MS items were used as support structures and platform/foundation for equipments and therefore would not qualify as inputs or capital goods. That the credit has been rightly disallowed.
5. I have heard the rival submissions and perused the records carefully. The issue whether steel items used in the fabrication of supporting structures, platforms for equipment and interconnecting pipelines to the equipments like evaporators, sugar melting system is eligible for credit is no longer res integra. In the decisions cited by the appellant, the view taken by the various High courts is that credit is admissible. In Mundra Ports & Special Economic Zone Ltd. case, the Honble High Court of Gujarat has observed regarding the judgment of the Tribunal in Vandana Global Ltd. case that the Tribunal in the judgment of Vandana Global Ltd. has not stated as to what was the aid used to arrive at the conclusion that the amendment brought forth to Rule 2(k) is clarificatory and has retrospective application. The Honble Court took the view that the amendment introduced w.e.f. 07/07/2009 is prospective only. In the case of India Cements Ltd., it has been categorically held that credit is admissible on MS items used for supporting structures. Similar view was taken in other cases relied by the appellant. Following the dictum laid in the above judgments, I hold that credit on the impugned MS items is admissible.
6. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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