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Showing contexts for: SAIL in ) M/S.Tata Steel Ltd vs ) Cce, Jamshedpur on 23 September, 2015Matching Fragments
Appearance:
Dr.Samir Chakraborty, Advocate & Shri Abhijit Biswas, Advocate for Appellant No.1-5.
Shri D.K.Acharya, Spl. Counsel for the Revenue CORAM:
Honble Dr. D.M. Misra, Member(Judicial) Honble Shri H.K.Thakur, Member(Technical) Date of Hearing :- 23.09.2015 Date of Pronouncement :- 05.01.2016 ORDER NO.FO/A/75016-75022/2016 Per Dr. D.M. Misra.
These seven appeals are filed against respective orders of the Commissioner of Central Excise, Bolpur/Jamshedpur and Commissioner of Central Excise(Appeals), Kolkata by the Appellants M/s Tata Steel(Appeal No. E/102/2006) & M/s SAIL(Appeal Nos.E-394, 520/06, 233/10 & 199/11) and Revenue(Appeal Nos.E-135-136/10), respectively. Since the issue involved in all these appeals are common, accordingly these are taken up together for hearing and disposal.
2. The facts involved in M/s.Tata Steel Ltd., are marginally different from the facts involved in other appeals filed by M/s.SAIL & also by the Revenue, hence, need to be stated separately.
2.1 In Tata Steels case, the facts in brief are that the appellant entered into correspondences with the Revenue beginning with their letter dated 08.10.2013, with a request to inform whether CENVAT Credit on rails and other track materials, namely, sleepers, paints and crossings etc. were eligible as inputs. Revenue responded through its letter dated 17.10.2003 informing that the goods in question do not merit inclusion in the category of inputs as the same do not go into the mainstream of the process of manufacture either directly or indirectly, nor included in the list of goods mentioned in the definition of Rule 2(g) of CENVAT Credit Rules, 2002. The appellant again requested through their letter dated 01.12.2003 pressing further that the definition of inputs as prescribed under Rule 2(g) of CCR,2002 allows credit on items used in or in relation to the manufacture of final product, whether directly or indirectly or whether contained in the final product or not; and since the rail track materials were used in their works for bringing raw materials and dispatching of finished excisable goods, accordingly CENVAT Credit on rails, sleepers, signal points, crossings etc. were eligible to CENVAT Credit. The department through its letter dt.17.12.2003 rejected the said contention and reiterated the stand taken by the Revenue in its letter dated 17.10.2003. Aggrieved by the said decision/communication, the appellant preferred a Writ Petition No.2463 of 2004 before the Honble Jharkhand High Court at Ranchi. The Honble High Court by its order dated 05.05.2006 dismissed their Writ Petition observing that no ground has been made out to interfere with the letter dated 17.12.2003.
2.3. The facts relating to the appeals filed by M/s.SAIL (EA-394/06, 520/06, 233/10 & 199/11) are that the appellants had availed CENVAT Credit on rails falling under Chapter Sub-Heading 7302.10 claiming the same as input being utilised in the Railway Locomotive Network spread inside the factory/plant for convenient transportation of raw materials, semi-finished goods and other materials. The department issued show cause cum demand notices from time to time alleging that eligibility of CENVAT Credit on rails & other materials claiming as inputs was irregular since it was shown as fixed asset and not inputs in their respective Balance sheets. Also, the amount of credit claimed on rails was not eligible to credit as the same failed to satisfy the definition of capital goods contained in Rule 2(b)/2(a) of CENVAT Credit Rules, 2002/2004. In the case of Appeal No.E-394/06, the show cause notice was issued on 14.08.2003 for the period 01.04.2000 to 31.03.2003 invoking extended period of limitation, but in all other Appeals periodical demand notices were issued for the normal period. On adjudication, the demands were confirmed with interest and equivalent penalty imposed. Aggrieved by the said orders the present appeals.
3.4 In respect of appeals filed by M/s.SAIL, challenging the contention of the Revenue that M/s.SAIL had declared and accounted the railway sleepers and rails as capital asset and consequently even though no depreciation might have been availed for the purpose of Income Tax on that part of the value representing Central Excise duty, the depreciation benefit having been enjoyed on the value of the rails, net of central excise duty, the claim for CENVAT Credit on inputs is to be disallowed, it is his contention that the Revenues allegation is not only factually erroneous, but also irrelevant in determining whether or not CENVAT Credit under the CENVAT Credit Rules is available in respect of the duty paid on the said goods. It is his contention that none of the input material involved, including rails have been capitalized. On the contrary, the same were reflected in the Expenditure part of the balance sheet of SAIL, under the heading Stores and Spares consumed. He has contended that in no balance sheet of a company, goods and materials are shown as capital goods. These are disclosed, in case they are so, as capital asset; the distinction between capital assets and capital goods has been explained by the Apex Court in the case of CCE v. Ginni Filaments Ltd. 2005 (181) ELT 145(SC).