Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/Case Law /2016-17/3397

Cenvat credit of Dumpers and tyres.

Case:-COMMISSIONER OF CENTRAL EXCISE, BHOPAL Versus HINDUSTAN COPPER LTD.
 
Citation:- 2016 (342) E.L.T. 282 (Tri. - Del.)

Brief facts: -The appeal by Revenue is against the order dated 20-2-2008 of Commissioner of Central Excise, Bhopal.
The respondents are engaged in the manufacture of copper concentrate liable to central excise duty. They have availed Cenvat credit on tyres and dumpers. Proceedings were initiated against them to recover such credit on the ground that these goods do not fall under the category of “capital goods” in terms of Rule 2(a) of Cenvat Credit Rules, 2004. The original authority after due process dropped the demand issued to the respondent. Revenue is aggrieved and is in appeal.
 
Appellant’s contention:- Ms. Neha Garg, AR, appeared for the Appellant.
 
Respondent’s contention:- None appeared on behalf of the respondent.
 
Reasoning of judgment:- The Hon’able judge have perused the appeal records. The original authority allowed the credit on tyres and dumpers. The Department is contesting the finding on the ground that these items are not covered by the definition of “capital goods”. The dumpers are essentially material handling equipments and the tyres used for such dumpers also are not eligible for Cenvat credit. It is Revenue’s contention that the dumpers classifiable under Chapter 87 of Central Excise Tariff Act, 1985 and the tyres classifiable under Chapter 40 are not eligible for Cenvat credit. It was submitted that when the product in question is not at all covered by the definition of ‘capital goods’ the question of allowing credit does not arise. It was further contended that decision of the Tribunal in India Cements - 2005 (182)E.L.T.398 relying on Hon’ble Supreme Court’s decision in Rajasthan State Chemical Works - 1991 (55)E.L.T.444 (S.C.) is not applicable to the present case as the said decision did not examine the meaning of ‘capital goods’ in terms of Cenvat Credit Rules, 2004.
They find that the eligibility of credit for dumpers and tyres have been examined in details by the original authority. The Hon’ble Supreme Court in Vikram Cement - 2006 (197)E.L.T.145 (S.C.) and in Madras Cements Ltd. - 2010 (257)E.L.T.321 (S.C.) held that capital goods used in captive mines are eligible for Cenvat credit. The original authority applied the said ratio as the respondent manufacturer is having their own captive mine which constitute one integrated unit. They note that the ratios of the cited decisions are to the effect that the capital goods used in the factory of manufacturer of the final product are eligible for credit. The factory of manufacturer should, by extension, mean the captive mine of the manufacturer from where the ores are sourced. The material handing equipments are for moving the raw material which are integrally connected with the manufacture of the final product. They also note that the application of scope of capital goods are not different from the erstwhile Modvat Rules in the present Cenvat Credit Rules, 2004. The Board vide Circular dated 2-12-1996 clarified that all parts, components, accessories which are to be used with capital goods and classifiable under any Chapter heading are eligible for Modvat credit. The Tribunal in a recent decision in MSP Steel and Power Ltd. - 2016-TIOL-2054-CESTAT-DEL, held that the use of dumper is as capital goods and is an essential and integrated process required in the manufacture of final products. It has been noted that in Malabar Cements Ltd. - 2002 (149)E.L.T.751 (Tri.-Bang.), the Tribunal allowed the Cenvat credit on dumpers as capital goods under erstwhile Rule 57Q [similar to Rule 2(a) of Cenvat Credit Rules, 2004]. In Tata Steels Ltd. - 2012 (282)E.L.T.459 (Tri.-Kolkata), the Tribunal allowed credit on coke transfer cars used within the factory for movement of goods. The decision of Tribunal in Malabar Cements Ltd. (supra) has been upheld by Hon’ble Supreme Court reported in 2003 (153) E.L.T. A94 (S.C.).
Considering the above analysis and discussion and following the ratio of Hon’ble Supreme Court (supra), they find no merits in the present appeal filed by Revenue. Accordingly, the same is dismissed. Cross-Objection filed by the respondents also stands disposed of.
 
Decision:- Appeal dismissed
 
Comment:- The analogy of the case is that relying on the discussion and the ratio of Hon’ble Supreme Court capital goods used in the factory of manufacturer of the final product are eligible for credit. Therefore, Cenvat credit of Dumpers and tyres used by copper concentrate manufacture for transport of ore from captive mines is allowed. The material handing equipments are for moving the raw material which are integrally connected with the manufacture of the final product. Hence these are eligible for credit.
Prepared by:- Monika Tak 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com