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/2013-14/1985

Whether capital goods credit admissible on wagons falling under Tariff Heading 86?

Case:- BULK CEMENT CORPORATION (INDIA) LTD. Vs COMMR. OF C. EX., BELAPUR
 
Citation:- 2013 (294) E.L.T. 433 (Tri. - Mumbai)

Brief facts:- Applicant filed this application for waiver of pre-deposit of duty of Rs. 1,09,36,128/-, interest and penalty of Rs. 10,00,000/-. The demand was confirmed after denying the credit in respect of wagons as capital goods. The brief facts of the case applicants were receiving duty paid cement in bulk from M/s. ACC Ltd. and the same was packed into bags and sold to the customer. The activity of repacking amounted to manufacture as per the provisions of Section 2(f) of the Central Excise Act. The applicant purchased duty paid wagons and availed the credit as capital goods. The Revenue denied the credit on the ground that the wagons were classifiable under Chapter 86 of the Central Excise Tariff, which was not covered under the definition of capital goods under the provisions of Rule 2(a) of Cenvat Credit Rules, 2004 and so were denied the credit.
 
Appellant’s contentions:- The contention of applicant was that wagons were used for procurement of raw material therefore the same was material handling equipment. Hence, the credit could not be denied on the ground that the same were not specified goods as per the provisions of Cenvat Credit Rules.

Respondent’s contentions:- Revenue relied upon the provisions of Cenvat Credit Rules and submitted that same could not be considered as capital goods or parts accessories of the specified capital goods. Hence, the demand was rightly made.

Reasons of judgment:- The Bench found that the applicant’s claimed credit on the wagons classifiable under Chapter 86 of the Central Excise Tariff as capital goods. For ready reference, the provisions of Rule 2(a) of Cenvat Credit Rules, 2004 were reproduced as below:-
 
“3. As per Rule 2(a) of Cenvat Credit Rules, 2004 “capital goods” means
(A)the following goods namely -
(i)     all goods falling under chapter 82, chapter 84, chapter 85, chapter 90 (heading 6805 grinding wheels and the like and parts thereof falling under chapter 6804) of the First Schedule of the Excise Tariff Act.
(ii)    pollution control equipments
(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 storage tanks used (1) in the factory of the manufacturer of the final product but does not include any equipment or appliance used in an office or (2) for providing output service
(vii)  motor vehicles registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zp), (zzp), (zzt) and (zzw) of clause (105) of Section 65 of the Finance Act.”
There was no dispute that the wagons were classifiable under Chapter 86 of the Central Excise Tariff and the same was not covered under the definition of capital goods. Further, the Bench found that the wagons could not be considered as components, spares and accessories of the specified goods. In view of this, they found that the applicant had not made out a case for waiver of duty as no financial hardship was pleaded during the arguments. Taking into facts and circumstances of the case and the interest of Revenue as provided under Section 35 of the Central Excise Act, the applicants were directed to deposit whole of the duty amount i.e.  Rs. 1,09,36,128/- within a period of eight weeks. On deposit of the above mentioned amount, the pre-deposit of interest and penalties were waived for hearing of the appeal. Compliance was to be reported on 31-5-2012.
 
Decision:- Stay application partly allowed.

Comment:-The analogy drawn from the case is that the wagons are classifiable under Chapter 86 of the Central Excise Tariff Act and so the same is not covered under the definition of capital goods. Further the wagons could not be considered as components, spares and accessories of the capital goods. Hence, primarily credit could not be availed on wagons.
 
 

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