M/s Kareli Sugar Mills P. Ltd. Versus CGST-CC & CE, Jabalpur
Central Excise
2018 (7) TMI 987 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 29-6-2018
Excise Appeal No. E/51362/2018 [SM] – A/52442/2018-SM[BR]
Central Excise
MRS. RACHNA GUPTA, MEMBER (JUDICIAL)
Present for the Appellant: Mr. P.C. Kaushik, Consultant
Present for the Respondent: Mr. H.C. Saini, D.R.
ORDER
PER: RACHNA GUPTA
The Order of Commissioner (Appeals) dated 30.11.2017 has been challenged vide the present Appeal.
2. The relevant factual matrix for the adjudication is that the appellant is engaged in manufacture of sugar and molasses, the excisable goods and the appellants are availing the facility of cenvat credit on inputs and capital goods for the manufacture of sugar. The Department during scrutiny of the records of the appellants noticed that they have availed cenvat credit on iron and steel items like angle, channel, joist, bar played sheet and coil falling under Chapter 72
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ve heard Shri PC Kaushik, Ld. Consultant for the appellant and Shri H.C. Saini, Ld. DR for the Department.
4. It is submitted on behalf of appellant that the Department has wrongly denied the iron and steel items on which the appellant has availed the cenvat cedit to be the capital goods. It is submitted that all those items were used by the appellant very much in the premises where the appellant was manufacturing sugar and molasses and was paying the excise duty thereof. The decision of Hon'ble Supreme Court in Union of India vs Hindustan Zinc Ltd. 2007(214)ELT 115 (S.C.) has been relied. It is in addition submitted that prior to 07.07.1999 availment of such credit was always available. It is only after the decision of Larger Bench in the case of Vandana Global Pvt. Ltd. Vs CCE, Raipur 2010 (253) ELT 440 that the credits on such iron and steel items on the ground of these being construction material has been denied. It is also submitted that though the certificate of the CE was calle
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tifying the said Order, Appeal is prayed to be set aside.
6. After hearing both the parties, I am of the view that the moot question for the present adjudication is as to whether the iron and steel items (angle, channel, joist, bar plate sheet and coil) can clearly fall under the definition of capital goods and the inputs. The definitions are reproduced as below:
Rule 2. Definitions. –
In these rules, unless the context otherwise requires,-
(a) “capital goods” means:-
(A) the following goods, namely:-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof; and
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Explanation 1.- The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever.
Explanation 2.- Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; but shall not include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods;
The Sub Clause (i) of Rule 2a of CCR makes it very clear that any item other than those falling under Chapters 82, 84, 85 and 90 will not be a capital good. Apparently and admittedly the impugned iron and steel items are falling under Chapter 72. For these items to still fall under the aforesaid definition, it is for the appellant to show that these items have been used as components, spares and accessories of the goods fal
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of the appellant to avail the cenvat credit on the impugned items.
8. The case of Hindustan Zinc Ltd. Supra as relied upon by appellant is not applicable to the present case. As in that case also, the Hon'ble Apex Court has been absolutely clear that for availing the cenvat credit on any goods which otherwise can be used for construction purposes, it has to be precisely shown that it is associated with the integral part of the process with which the machines engaged for the purpose can be utilized. There is nothing of this sort on record of the present case. Though the certificate of CE of the appellant was produced after it was demanded by the Adjudicating Authority below but that certificate is also miserably silent to certify these iron and steel items to have been used so integrally so as to entitle the appellant to avail the cenvat credit. The conduct of appellant for denying the reliability on CE certificate is also observed as improper for the reason as pointed out by the Ld. D
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