Custom, Excise & Service Tax Tribunal
M/S Maruti Ispat & Energy Pvt.Ltd vs The Commissioner on 3 November, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No. E/25145/2013 (Arising out of Order-in-Appeal No.65/2012(T)CE, Dated 17-10-2012 passed by Commissioner (Appeals), C.CE&ST, 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 Maruti Ispat & Energy Pvt.Ltd. ..Appellant(s) Vs. The Commissioner C.CE&ST, Guntur. ..Respondent(s)
Appearance Shri B.V.Kumar, Advocate for the Appellant. Shri Arun Kumar, AR for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 03/11/2016 Date of Decision: 03/11/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.]
1. The appellants are engaged in the manufacture of sponge iron and are availing the facility of Cenvat credit of excise duty paid on inputs/capital goods and Service tax paid on input services. During the scrutiny of ER-1 return and further verification of invoices along with Cenvat statements, it was noticed that the appellant had availed irregular credit of duty paid on items namely Ms channel, MS beams, MS joist, HR coils, HR plates, Woven Wiremesh etc., which were used in the fabrication of capital goods. According to department, fabrication of structure do not fall under the definition of capital goods. A show cause notice notice was issued raising the above allegation, which, after adjudication confirmed the duty, interest and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant, the Ld. Counsel Shri B.V.Kumar adverted to the definition of capital goods and submitted that the subject items were used for fabrication of parts/components of capital goods. He adverted to the Chartered Engineer Certificate and submitted that the use of the subject item has been certified by the Chartered Engineer. He relied upon the decision laid in the case of CCE, Tiruchirapally Vs India Cement Ltd. [2012(285) ELT-341 (Mad), CCE, Jaipur Vs Rajasthan Spinning & Weaving Mills Ltd [2010(255)ELT-481-(SC), M/s Ramala Sahakari Chinnii Mills Vs CCE, Meerut [2016(334)ELT-3(SC), also the decision passed by this Tribunal in the case of Matrix Laboratories Ltd. Vs CCE & ST,Hyd-1[2016(339)ELT-122(Tri. Hyd) and M/s Suguna Metals Pvt.Ltd. Vs CCE & EST, Hyd-I[2016(339) ELT-119(Tri. Hyd).
3. On behalf of the department, the Ld. AR reiterated the findings in the impugned order. He submitted that MS channel, MS beams, etc., do not fall within the definition of capital goods and therefore, the authorities below have rightly denied the credit.
4. I heave both sides.
5. The issue posing for consideration is whether the Cenvat credit is admissible on MS items, MS beams etc. According to the appellant, the subject items were used for fabrication of parts component and accessories of capital goods. The appellant has also furnished the Chartered Engineer Certificate, detailing the usage of the subject items within the factory. The said certificate shows that the subject items were used for making the raw material bunkers , finished product bunkers, intermediate bunkers,(storage), rotary kiln , rotary cooler, chimneys, after burning chambers, dust settling chamber, bi-metallic strip, detonox, conveyors etc. The functions of these capital goods are explained by the Chartered Engineers Certificate. It shows that without such goods, the manufacturing process cannot be carried out. The Ld. Counsel submitted that the appellant had availed the credit under category of capital goods and is now shifting the claim under the category of inputs. The issue whether the appellant is eligible for credit falling under the category of inputs, when the earlier claim was made under the category of capital goods, is well settled by the judgment laid in CCE, Meerut Vs Modi Rubber Ltd 2000(119) ELT-197(Tri-LB) and Sanghvi Forging & Engineering Ltd. Vs CCE Vadodara-2014(302)ELT-136(Tri-Ahmd) . Therefore, the appellants claim that subject items are t be considered as inputs used for fabrication of capital goods is acceptable.
6. The issue whether the subject items are eligible for credit, when used for the fabrication of parts/component /accessories of capital goods has been settled by the decisions relied by the appellant and stated supra. The Honble Apex Court in the Rajasthan Spinning & Weaving Mills Ltd case has laid down the user test. The appellants have been able to establish that without fabrication of such parts, accessories, components of capital goods it is not able to carry out the process of manufacture as these capital goods are integral for carrying out the manufacturing activity. In view of the facts of the present case being similar to the cases already decided by this Tribunal, applying the ratio in the above judgment, I hold that the credit is admissible. This Tribunal in the above decisions have relied on the judgment passed by Honble Apex court and Honble Madras High court relied by appellant.
7. The impugned order is set aside and the appeal is allowed with consequential reliefs, if any.
(Dictated & Pronounced in open court) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) dks.
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