Custom, Excise & Service Tax Tribunal
M/S. Vij Engineers & Consultants Pvt. ... vs Commissioner Of Central Excise & St., ... on 6 April, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. II APPEAL NO. E/807/2012 [Arising out of Order-in-Appeal No. 540/BK/RTK/2011 dated 30.12.2011 passed by the Commissioner of Central Excise (Appeals), Delhi-III (Gurgaon)] For approval and signature: Honble Mr. Devender Singh, Member (Technical) M/s. Vij Engineers & Consultants Pvt. Limited : Appellant vs. Commissioner of Central Excise & ST., Rohtak : Respondent
Appearance:
Shri Amrinder Singh, Advocate for the Appellant(s) Shri G.M. Sharma, A.R. for the Respondent(s) CORAM:
Honble Mr. Devender Singh, Member (Technical) Date of hearing : 13.12.2016 Date of decision : 06.04.2017 FINAL ORDER No. 60562/2017 Per : Devender Singh The appellants are in appeal against the Order-in-Appeal No. 540/BK/RTK/2011 dated 30.12.2011 passed by the Commissioner of Central Excise (Appeals), Delhi-III (Gurgaon).
2. Brief facts of the case are that, appellants M/s. Vij Engineers & Consultants Pvt. Limited are registered with the department for manufacture of Steel Towers falling under Chapter 73 of Central Excise Tariff Act, 1985. The appellants are also registered for service tax under the category of Transportation of goods by Road and Erection, Commissioning and Installation Services. A show cause notice was issued to the appellants on the grounds that Cenvat credit on Paint which they claimed as their input during the period 2006-07 to 2009-10 (up to December 2009) has been wrongly availed. The show cause notice was adjudicated and the demand was confirmed along with interest and imposition of equivalent penalty. The appellants went in appeal. The Commissioner (Appeals), rejected their appeal. Aggrieved by the same, the appellants have filed this appeal.
3. Ld. Advocate for the appellant submits that there are two parts of each purchase order mainly, (a) Supply of towers (b) Erection and painting of towers. The appellants have paid excise duty on part A and are discharging service tax on part B under the category of Erection, Commissioning and Installation Services. The paint is cleared along with the steel tower parts from the factory and the value of the paint is included in the value charged for supply of towers. The appellant is availing Cenvat credit of the excise duty paid on paint, which is used in the manufacture of steel tower parts. Further, it was submitted that the paint is an Input for the manufacture of towers because it is used to de-rust the steel towers. The paint is received in the factory of production and it is cleared along with final product. Hence, the paint is used as an input for the manufacture of steel towers. He also argued that concept of within the factory of production is not applicable to paint. The expression, within the factory of production is applicable only to one category of goods, in the inclusive part of the definition, i.e. goods used for generation of electricity or steam. He relied upon the following case laws in his support:-
(a) Vikram Cements vs. CCE, Indore 2006 (194) ELT 3 (SC)
(b) CCE, Nagpur vs. KEC International Limited 2016 (335) ELT 344 (Tri. Mumbai.) He further contended that since the duty has been collected by the department on the paint cleared from the factory, Cenvat credit on the same cannot be denied. In this regard, he relied upon the following decisions:-
(a) PSL Holdings Limited vs. CCE, Rajkot 2003 (156) ELT 602 (Tri. Mumbai)
(b) Standard Surfactants Limited vs. CCE, Kanpur 2000 (115) ELT 763 (Tribunal)
(c) Crompton Greaves Limited vs. CCE, Mumbai 2008 (230) ELT 488 (Tri. Mumbai) He also argued that the appellant is entitled to take Cenvat credit on the paint from the date on which the appellants Panipat unit was registered under Service Tax law. He further submitted that the demand is barred by limitation and no penalty is imposable. He relied upon the following decisions in this regard:-
(a) CCE, Mangalore vs. Pals Microsystems Limited 2011 (270) ELT 305 (SC)
(b) Gammon India Limited vs. CCE, Goa 2002 (146) ELT 173 (Tri. Mumbai) [affirmed in 2002 (146) ELT A313]
4. Ld. AR reiterated the findings in the order of Commissioner (Appeals). He relied upon the following case laws with regard to limitation aspect:-
(a) CCE, Visakhapatnam vs. Mehta & Co. 2011 (264) ELT 481 (SC)
(b) CCE, Surat vs. Neminath Fabrics Pvt. Limited 2010 (256) ELT 369 (Guj.)
5. Heard both the parties and examined the record. I find that the order of Commissioner (Appeals) suffers from a serious infirmity. As rightly pointed out by the ld. Advocate, first two paragraphs containing findings on merits, in para-5 of the Order-in-Appeal, are exactly the same and are reproduced from the order of the adjudicating authority. This shows that the Commissioner (Appeals) has not applied his mind properly to the issue and the order has been passed with less than complete application of mind. The same is also evident from the lack of any finding on the submissions of appellants summarised in para -3 of Order-in-Appeal.
6. In view of the above, the matter needs to be re-examined properly by the first appellate authority who would give specific findings on the averments made by the appellant. All the issues are kept open. Needless to say that fair opportunity would be given to appellants to present their case.
7. In the result, the appeal is allowed by way of remand, in the above terms.
(Order pronounced in the court on 06.04.2017) Devender Singh Member (Technical) KL 1 Appeal No. E/807/2012-SMC 1