Custom, Excise & Service Tax Tribunal
M/S Ultratech Cement Ltd vs Cce & St, Jaipur Ii on 15 November, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 15/11/2016. DATE OF DECISION: 15/11/2016. Excise Appeal No. 55503 of 2013 (SM) [Arising out of the Order-in-Appeal No. 56 (RDN) CE/JPR-II/2012 dated 15/10/2012 passed by The Commissioner of Central Excise (Appeals II), Jaipur.] For Approval and signature : Honble Shri Ashok Jindal, 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 would 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 : Department Authorities? M/s Ultratech Cement Ltd. Appellant Versus CCE & ST, Jaipur II Respondent
Appearance Shri Rahul Tangri, Advocate for the Appellant.
Shri Dharam Singh, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri Ashok Jindal, Member (Judicial) Final Order No. 55428/2016 Dated : 15/11/2016 Per. Ashok Jindal :-
The appellant availed Cenvat credit on certain steel items which has been used in fabrication of plant and machinery and Cenvat credit on welding electrodes which has been used in repair and maintenance of plant and machinery. The Revenue sought to deny Cenvat credit of these two items as these are neither inputs nor capital goods to avail Cenvat credit.
2. Heard the parties considered the submissions.
3. On hearing the parties I find that the following issues emerges from the facts of the case :-
(i) whether appellant is entitled to Cenvat credit on welding electrodes which has been used for repair and maintenance of plant and machinery and
(ii) whether the appellant is to avail Cenvat credit on steel items such as MS Plates, Angles, Channels etc. which have been used in fabrication of plant and machinery or not.
4. Regarding issue number (i), the said issue has been dealt by the Tribunal in the case of Singhal Enterprises Pvt. Ltd. vs. CC & CE, Raipur reported in 2016 TIOL 2451 CESTAT DEL., wherein this Tribunal observed as under :-
12.?We have gone through the judgment of the Honble High Court of Allahabad cited by the Revenue. We find that the Honble High Court has considered the claim of Welding Electrodes under the definition of Capital Goods under Rule 2 (a) of the Cenvat Credit Rules, 2004 and have come to the conclusion that the credit will not be allowable under this Rule. However, we find that the credit of duty paid on Welding Electrodes has been held allowable by several decisions of this Tribunal and hence the issue is no more res-integra. We also find that several High Courts have also allowed such credit considering the same as allowable within the definition of Input under the Cenvat Credit Rules. One such reference can be made to the decision of the Honble High Court of Chhattisgarh in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur - 2010 (256) E.L.T. 690 (Chhattisgarh) = 2010 TIOL 309 HC CHHATTISGARH CX., wherein welding electrodes used for repair and maintenance purpose were also held to be cenvatable. Similarly, in the case of Hindustan Zinc Limited vs. Union of India, 2008 (228) E.L.T. 517 (Raj.) = 208 TIOL 408 HC RAJ CX., the Honble High Court Rajasthan allowed the Cenvat credit on the welding electrodes. By following said decision, we hold that the appellants are entitled to the credit on welding electrodes considering them as inputs.
The learned Counsel also relied in the case of Dwarikesh Sugar Industries Ltd. vs. CCE, Meerut reported in 2016 (334) E.L.T. 48 (All.), I find that in the case of Singhal Enterprises Pvt. Ltd. (supra) this Tribunal has examined the case also and thereafter arrived at the decision that appellant is entitled to avail Cenvat credit on welding electrodes which has been used in repair and maintenance of plant and machinery. Therefore, relying on the decision of the Tribunal in the case of Singhal Enterprises Pvt. Ltd. (supra), I hold that appellant has correctly availed Cenvat credit on welding electrodes.
5. Regarding the issue number (ii), the next issue before me is that whether appellant is entitled to avail Cenvat credit on steel items which has been used for fabrication of plant and machinery. For availment of Cenvat credit it has to be taken into mind that whether these steel items have been used for plant and machinery or not, therefore, uses tests are required. The said issue was also examined by the Tribunal in the case of Singhal Enterprises Pvt. Ltd. (supra) wherein the Tribunal observed as under :-
15.?We find that the controversy can be laid to rest by making a reference to the decision of the Apex Court in the case of CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd., - 2010 (255) E.L.T. 481 (S.C.) = 2010 TIOL 51 SC CX., wherein the Honble Supreme Court has considered an identical issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgment, the Apex Court has referred to the user test evolved by the Apex Court in the case of CCE, Coimbatore vs. Jawahar Mills Ltd., - 2001 (132) E.L.T. 3 (S.C.) = 202 TIOL 87 SC CX., which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the user test to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace etc. cannot be suspended in mid air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of Capital Goods includes, components, spares and accessories of such capital goods. Accordingly, applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2 (a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat credit.
6. The case of the Revenue is that these structures have become immovable property, therefore, appellant is not entitled for Cenvat credit. In fact these structures wagon, loading system is the integral part of the plant and machinery and same has been used for transportation of finished goods. In these circumstances, user tests qualifies that these items have been used for fabrication of plant and machinery, therefore, appellant is entitled for Cenvat credit.
7. In these terms, the Cenvat credit on steel items and welding electrode is allowed. Accordingly, the impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in open court.) (Ashok Jindal) Member (Judicial) PK ??
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