Custom, Excise & Service Tax Tribunal
M/S. Jaypee Bela Plant vs C.C.E. & S.T. Bhopal on 14 October, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Excise Appeal No. E/55001/2014 -Ex[SM]
[Arising out of Order-In-Appeal No. BPL-Excus-000-APP-293-13-14 dated: 11.03.2014 passed by Commissioner (Appeals) Bhopal]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, 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 Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Jaypee Bela Plant ...Appellant
Vs.
C.C.E. & S.T. Bhopal Respondent
Appearance:
Mr. Vipin Upadhyay, Advocate for the Appellants Mrs. Kanu Verma Kumar, AR for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing.14.10.2015 FINAL ORDER NO. 54198 /2015 Per S. K. Mohanty (for the Bench):
The brief facts of the case are that the appellant is engaged in the manufacture of Cement and Clinker in its factory and avails cenvat credit on various inputs and capital goods used in or in relation to manufacture of final product. During the disputed period, the Department initiated Show Cause proceedings, seeking recovery of cenvat credit on input such as iron and steel articles on the ground that the said goods cannot be considered as input for the purpose of manufacture of the final products. The matter was adjudicated vide order dated 26.09.2012, wherein the Deputy Commissioner of Central Excise has confirmed the demand for Rs. 2,51,920/- along with interest and also imposed penalty of Rs. 50,000/-. In appeal, the Ld. Commissioner (Appeals) vide the impugned order dated 11.03.2014 has upheld the demand confirmed in the adjudication order. Hence this present appeal before the Tribunal.
2. Sh. Vipin Upadhyay, the Ld. Advocate for the appellant submits that the disputed goods have been used for fabrication, repair and maintenance of the capital goods installed in the factory. He submits that by nature of use of disputed goods, the same should be considered as input and input as defined in Rule 2(k) of the Cenvat Credit Rules, 2004 and the cenvat credit on such items will be eligible. He further submits that since the disputed goods were used for carrying out the repair and maintenance work in the machines falling under chapter 84 and 85 of the Scheduled to the Central Excise Tariff Act, the same should consider for cenvat benefit. To Justify his stand that cenvat credit cannot be denied to the appellant, the Ld. Advocate relies on the judgment of Honble Rajasthan High Court in the case of UOI vs Hindustan Zinc Ltd. reported in 2007 (214) ELT 510 (Raj). and the judgment of Honble Karnataka High Court in the case of Hindalco Industries Ltd. vs CCE reported in 2012 (286) 503 (Kar.).
3. On the other hand, the Ld. Commissioner (AR) appearing for the respondent submits that since there is no nexus between the disputed goods and the finished product manufactured by the appellant, cenvat benefit cannot be permissible either as input or as capital goods. To justify her above stand that the disputed goods cannot be considered as capital goods, she relies on the judgment of the Honble Supreme Court in the case of Madras Cements Ltd. vs CCE reported in 2010 (254) ELT 3 (S.C.).
4. Heard the Ld. Counsel for both the sides and perused the records.
5. It is an admitted fact that the disputed goods have been used by the appellant for repair, maintenance and fabrication of the machines/ machineries installed in the plant. The cenvat benefit has been denied on the sole ground that there is no record to show that the disputed goods have been used for manufacture of specific parts/ accessories of the capital goods. I find from the purchase requisition slips available in the file that the appellant had clearly mentioned the requirement of the disputed goods for the intended purpose i.e. for repair and maintenance of various machines, namely, kiln, Clinker stock pipes etc. Since the machines/ machineries where the disputed goods have been used are confirming to the classification of the goods under chapter 84 and 85 of the Central Excise Tariff Act. I am of the view that the disputed goods shall merit consideration as capital goods as per the definition contained in Rule 2(a)(A) of the Cenvat Credit Rules, 2004. Even assuming that the disputed goods cannot be considered as capital goods, still I am of the view that the same shall be considered as input for the purpose of taking cenvat credit in view of the unambiguous definition of input contained in Rule 2(k) of the Cenvat Credit Rules. As per the definition of input contained in the said rules, all goods excepting certain few are eligible for cenvat benefit. The excluded goods are cement, angles, channels etc. used for construction of factory shade/ building or lying of foundation or making of structure i.e. support of capital goods. It is nobodys case that the disputed goods have been used for the exclusion mentioned in the definition clause. Since the goods in question, are being used for fabrication, repair and maintenance of capital goods which has also been admitted by the Department, I am of the view that the same should be eligible as input for the purpose of taking cenvat credit. In this context, I find that the Honble High Court in the case of Hindustan Zinc (supra) has allowed the cenvat benefit on the disputed goods by holding that the same should be considered as capital goods. The judgment of Honble Supreme Court in the case of Madras Cement Ltd. (supra) relied on by the Ld. AR is distinguishable from the facts of the present case inasmuch as the said judgment was delivered in context with the statutory provisions in vogue during the regime of modvat scheme. Since the present dispute is covered under the cenvat region and the definition of input is broad enough to cover within its ambit all the goods excepting the certain restricted items within its purview for the purpose of taking cenvat credit, denial of cenvat benefit will be against the legislative ... Therefore, the judgment cited by the Ld. AR is distinguishable.
6. In view of above, I do not find any substance in the impinged order passed by the Ld. Commissioner (Appeals) and, therefore, the same is set aside and the appeal is allowed in favour of the appellant.
(Dictated and pronounced in open court) (S.K. Mohanty) Member(Judicial) Neha 5 | Page E/55001/2014-Ex[SM]