Whether the HR plate, AMP plate, mill plates & steel plates, jointing sheets & paints admissible to cenvat credit?

PJ/CASE LAW/2015-16/2956

Case-COMMISSIONER OF C. EX., NOIDA Versus KISAN SAHKARI CHINI MILLS LTD.

Citation-2015 (326) E.L.T. 333 (Tri. - Del.)

Brief Facts-The revenue is in appeal against the impugned order wherein the Ld. Commissioner (A) has allowed input credit on the items namely Steel/ Mill Plates & HR Sheets, Jointing Sheets, V Belt, Centrifugal Screen as well as paints & welding electrodes on the premise that these are used in fabrication of capital goods.

Appelants Contention-The contention of the revenue is that the items like HR plate, AMP plate, mill plates and steel plates, jointing sheets and paints were not used by the respondent for fabrication of capital goods. Therefore, in these items respondent is not entitled to take Cenvat Credit. To support his contention he relied on the decision in the case of Saraswati Sugar Mills v. C.C.E., Delhi-III - 2011 (270)E.L.T.465 (S.C.).

Respondents Contention-On the other hand ld. counsel for the respondent submits that all these items were used as capital goods for parts thereof. Therefore, they are entitled to take Cenvat Credit on these items as held by Hon’ble High Court of Rajasthan in the case of UOI v. Hindustan Zinc Ltd. - 2007 (214)E.L.T.510 (Raj.) which has been affirmed by Hon’ble Apex Court. She further relied on the decision in the case of Raymond Ltd. v. C.C.E. Bhopal- 2014 (300)E.L.T.466 (Tri.-Del.).

Reasoning Of Judgement-Heard the parties. Considered the submissions.
They have perused the impugned order. In the impugned order Ld. Commissioner (A) has examined the usage of the items in question and have given the following findings at para 4.2 which are reproduced as under :
“4.2 HR Sheets, PMP Plate Mill Plates & Steel Plates/Jointing sheets and Paints,
With regard to usage of these items, the appellants have submitted that the various items of capital goods including staging / supporting structure were fabricated out of these items of iron and steel; the items in question were used in the factory for general maintenance, roofing purposes and used in erection of factory and store which in turn were used in the manufacture of the final products and therefore, all these items in question may be treated as ‘input’ used for manufacture of capital goods and hence eligible for Cenvat Credit under Explanation of Rule 2 of the Cenvat Credit Rules because the said explanation 2 reads as ‘input’ include goods used in the manufacture of capital goods which are further used in the factory of manufacture.”
After going through the above said findings the tribunal found that the usage of these items includes staging supporting structures and factory for general maintenance, roofing purpose and used in erection of capital stock admittedly the usage of these items which have been recorded by the Ld. Commissioner (A) in the impugned order are not in nature of usage of fabrication of capital goods. Therefore, the Cenvat Credit on these items namely HR sheets PMP plate different sheet and steel plate is not admissible to the respondent. Consequently the respondent is directed to reverse the said Cenvat Credit along with interest. As the issue is of deciding whether they are admissible to the Cenvat Credit on these items was in dispute during the relevant period. Therefore, penalty on the respondent is not imposable. With these terms appeal is disposed off.

Decision-Appeal disposed of

Comment-The analogy in the case is that according to Explanation of Rule 2 of Cenvat Credit Rules ‘input’ include goods used in the manufacture of capital goods and which are further used in the factory of manufacture.”But as in the given caseHR sheets, PMP plate, mill plates and steel plates, jointing sheets and paints are used for staging supporting structures and factory for general maintenance roofing purpose and in erection of capital stock and as such use is not in nature of usage of fabrication of capital goods accordingly the cenvat credit is not admissible. And, regarding penalty issue the same is not imposed because the fact regarding admissibility of credit on said items is disputed.

Prepared By-Neelam Jain

Comments

PJ/CASE LAW/2015-16/2956

Post a Comment

Query