Custom, Excise & Service Tax Tribunal
M/S. Smita Steels Rolling Mills Pvt Ltd vs Commissioner Of Central Excise Mumbai on 22 February, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1377, 1381/10 (Arising out of Order-in- Appeal No. VSK/57& 58/Th-I/2010 dated 26/3/2010 passed by the Commissioner (Appeals) Central Excise Mumbai Zone-I] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
M/s. Smita Steels Rolling Mills Pvt Ltd
:
Appellants
VS
Commissioner of Central Excise Mumbai
:
Respondent
Appearance
Shri. Vinod Awtani, C.A. for the Appellants
Shri. H.M. Dixit, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 22/2/2016
Date of decision: /2016
ORDER NO.
Per : Ramesh Nair
These two appeals are directed against Order-in- Appeal No. VSK/57& 58/Th-I/2010 dated 26/3/2010 passed by the Commissioner (Appeals) Central Excise Mumbai Zone-I wherein Ld. Commissioner(Appeals) upheld the Orders-in-Original No. 09/VMJ-09/2007/Thane-I and No. 150/06-07 dated 27/12/2007 and 30/3/2007 respectively.
2. The issue involved in these appeals are whether the appellant are entitle for Cenvat credit in respect material like cement, angles, channels, electrodes, CTD Bars and H.R. Plates. Ld. Lower authorities denied the Cenvat credit on the ground that all these materials are for general purpose, structural items used for carrying out civil engineering work and therefore could not be treated as accessories of machines installed in the factory. It was also contended that longer period is invokable as the appellant has suppressed the fact of availing Cenvat credit on these ineligible items.
3. Shri. Vinod Awtani, C.A. appearing on behalf of appellant submits that as regard the items namely cement, angles, channels, electrodes, CTD Bars and H.R. Plates submits that these items were used as parts of charging roller table/Mill platform/cooling bed/pusher/blower/discharging roller table/tilting table lifting table spender etc. therefore these were used as parts of capital goods which in turn used in production of final product. He submits that on the very same items Adjudicating authority in Order-in-Original related to appeal No. E/1377/10 allowed the credit whereas in other appeal E/1381/10 credit was disallowed whereas use of these items are same as shown in the Order-in-Original dated 27/12/2007 where credit was allowed. Department has accepted order allowing credit and not filed any appeal therefore credit on angle, channel, HR Plates was wrongly disallowed. As regard welding electrodes, he submits that this also used for fabrication of plant and machinery within the factory of the appellant therefore used as part of capital goods. He submits that as regard the Cenvat credit on CTD Bars and cement, it is his submission that these items were used for making foundation on which furnace was erected and installed. It is not used for building civil construction therefore credit should be allowed on these items. He placed reliance on following judgments:
(a) Commissioner of Central Excise, Jaipur Vs. M/s. Rajasthan Spining & Weaving Mills Ltd[2010-TIOL-51-SC-CX]
(b) The Commissioner of Central Excise Vs. M/s. Ispat Industries Ltd[Appeal No. 187 of 2006 dated 19/7/2007 passed by Honble Bombay High Court]
(c) M/s. Thiru Arooran Sugars Vs. Custom, Excise and Service tax Appellate Tribunal [2015-TIOL-1734-HC-MAD-CX]
(e) Mundra Ports and Special Economic Zone Ltd Vs. Commissioner of Central Excise and Customs[2015-TIOL-1288-HC-AHM-ST]
(f) ACC Ltd Vs. Commissioner of Central Excise, Nagpur [2009(237) ELT 573(Tri. Mumbai)]
(g) G.M.R. Industries Ltd. Vs. Commissioner of C. Ex. Visakhapatnam-I[2009(241) ELT 388(Tri. Bang.)] He also submits that the issue of Cenvat credit on these items is debatable right from beginning and various conflicting judgments were passed therefore issue was referred to the Larger Bench in case of Vandana Global Ltd Vs. Commissioner of C. Ex. Raipur[2010(253) ELT 440(Tri. LB)]. In this circumstances, extended period of limitation cannot be invoked. He further submits that on the same issue for the period December, 2002 to August, 2003 first show cause notice was issued on 2/5/2006 and for same period on the similar items Second show cause notice for period October, 2001 to September, 2003 on 3/11/2006. It is his submission that it is settled law that once any show cause notice is issued, second show cause notice on the same issue cannot be issued for longer period for this reason also demand in Appeal No. E/1377/10 almost time bar. In Appeal No. E/1381/10 since issue involved is of interpretation of admissibility of the Cenvat credit and the matter was referred to the larger bench, demand in this case also time bar. He placed reliance on the following judgments:
(a) M/s. Megafine Pharma Pvt Ltd Vs. Commissioner of Central Excise and Service Tax, Daman[2014-TIOL-1312-CESTAT-AHM]
(b) M/s. Cetex Petrochemicals Ltd Vs. Commissioner of Central Excise, Chennai-I[2013-TIOL-1760-CESTAT-MAD]
(c) Commissioner of Central Excise Panchkula Vs. Decent Drugs Pvt Ltd[2014-TIOL-666-CESTAT-DEL]
(d) Union of India Vs. Bharat Aluminium Co. Ltd [2012(26) S.T.R. 101(Chhatisgarh)]
(e) S.K. Goyal Vs. Commissioner of Central Exicse, Delhi-IV[2013-TIOL-1823-CESTAT-DEL]
(f) Nazam Sugar Factory Vs. Collector of Central Excise, A.P.[2008(9) S.T.R. 314(S.C.)]
4. Shri. H.M. Dixit, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
He submits that all the subject goods are in the nature of either civil construction material or supporting structural steel. He submits that in the Larger Bench judgment of Vandana Global Ltd(supra) Tribunal has held that steel items used for supporting structural are neither input nor capital goods, he further relied upon the judgment in case of Upper Ganges Sugar & Industries Ltd Vs. Commr. of C. Ex. Meerut-II[2013(293) ELT 186(All.)]
5. I have carefully considered the submissions made by both sides and perused the record.
6. I find that items such as channel, angles, H.R. Plates, welding electrodes were admittedly used in the manufacture of parts of furnace and other machinery. In the appellants own case in the adjudication order dated 27/12/2007 credit was allowed, on these items, which was accepted by the department. In appeal No. E/1381/10 by order in original dated 30/3/2007 items used for the same purpose, credit was disallowed. I further found that in view of the Honble Supreme Court judgment in Rajasthan Spinning and Weaving Mills Ltd(supra) credit was allowed on material used for fabrication of Chimney that shows that if steel items is used for fabrication/manufacture of Capital goods credit should be allowed. On the same analogy in the present case channel, angles, H.R. Plates, welding electrodes were used for fabrication/manufacture of parts or furnace which is capital goods, I am therefore of the view that credit on these items are admissible. As regard credit on cement and CTD Bars, these items were neither used as capital goods nor as input for manufacture of Capital goods for the reason that Cement and CTD bars were admittedly used for making civil structure i.e. foundation for erection or installation of furnace. Though it is made for erection or installation of machinery but it is civil construction like building construction therefore credit on CTD bar and cement is not admissible. As regard limitation in respect of credit taken on CTD bars and Cement, I am of the view that since appellant have not disclosed the fact about use of these material to the department, it amounts to suppression of facts therefore the extended period is rightly invoked. In case of Commissioner of Customs and Central Excise, Ghaziabad Vs. M/s. Rathi Steel and Power Ltd[2015-TIOL-1416-HC-ALL-CX] Honble High Court held that there is willful suppression of material fact by the assessee as well as contravention of the provisions of the Act and rules. The fact of the said judgment are more or less similar to the facts of the present case therefore Ld. lower authority rightly invoked the extended period. Hence the demand of Cenvat credit in respect of CTD bars and Cement is sustainable. In view of the my above discussion, the credit in respect of Channal, Angles, HR Plates, welding Electrodes are allowed. Credit on CTD bars and Cement is disallowed. Adjudicating authority shall re-quantify the demand and penalty and interest commensurate to re-quantified amount of demand. Appeals are partly allowed in above terms.
(Order pronounced in court on______________) Ramesh Nair Member (Judicial) sk 7 E/1377, 1381/10