C.C.E., Raipur vs M/S. P.D. Industries Pvt. Ltd

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes

Appeal No. E/2536/2010-EX[SM]

[Arising out of Order-in-Appeal No.158/RPR-I/2010, dated 15.04.2010 passed by the C.C.E.(Appeals), Raipur-I]

C.C.E., Raipur Appellant

Vs.

M/s. P.D. Industries Pvt. Ltd. Respondent

Appearance

Mr. RK Mishra, DR - For Appellant

Mr. M.P. Singh, Advocate - For Respondent

CORAM: Honble Mr. S.K. Mohanty, Member (Judicial)

Final Order No.54167/2015, dated 17.09.2015

Per Mr. S.K. Mohanty :

Revenue is in appeal against the impugned order dated 15.04.,2010 passed by C.C.E.(Appeals), Raipur. The brief facts of the case are that the respondent herein is engaged in the manufacture of sponge iron, falling under Chapter 72 of the Central Excise Tariff Act, 1985. The respondent avails CENVAT credit of central excise duty paid on inputs and capital goods, used in or in relation to manufacture of final products within the factory. During the period April, 2004 to March, 2008 and May 2008 to October, 2008, the respondent had taken credits amounting to Rs.37,83,963/- and Rs.67,387/- respectively on MS angle, channel, joist, HR coil, chequered plates and flat, etc. considering the same as inputs. Taking of CENVAT credit was also denied by the Central Excise Department on the ground that the disputed items are neither covered under the definition of capital goods or inputs. The Show Cause Notices issued in this regard culminated in the adjudication order dated 05.02.2010, wherein the CENVAT credit of the above mentioned amounts were disallowed and ordered for recovery along with interest. Further, equal amount of penalties were imposed on the respondent. In appeal, the ld. Commissioner (Appeals) vide the impugned order has allowed the appeal of the respondent holding that the availment of CENVAT credit on the disputed goods is legal and proper, as the said goods are conforming to the definition of input and capital goods contained in the CENVAT scheme. Feeling aggrieved with the impugned order, Revenue is in appeal before this Tribunal.

3. Heard Shri R.K. Mishra, ld. Departmental Representative appearing for Revenue and Shri MP Singh, ld. advocate appearing for the respondent and perused the records.

4. I find that upon consideration of the issue and the facts involved in this case, the ld. Commissioner (Appeals) has held that the disputed goods shall be considered as input/capital goods for the purpose of availment of CENVAT credit. The relevant paragraph in the impugned order is extracted herein below:-

It is a fact on record that appellant a holder of Central Excise Registration is a manufacturer of Sponge Iron and has availed credit on various items such as MS Angle, Channel, Joist, HR Coil, Chequered Plates, and Flat etc. used as structural items and used in erection and installation of various machines and equipments essential for their manufacturing activities. The impugned goods are used in the erection or installation of Stock Storage Tank, Conveyor Systems, Finished Goods Storage Tank and in Supporting structures of various Capital Goods such as Kiln, Cooler, ABC (Rotary Kiln) Coal ground Hopper, Crusher and Screening Machinery etc. which were ultimately used for carrying the manufacturing activities of the appellant. It is also fact known and accepted that structural items such as Angles, Channels, plates etc. are always required to make machines junctions smooth and without their help it is very difficult for any machines to run smoothly giving the desired production or result and thus these items are always linked with machinery used in the production of final products. Once it is established that these items are essential for production, smooth running, greater efficiency and better result becoming an essential supplement to plant and machinery for use of manufacturing activities and thus an integral part of process with which the primary machines are engaged. I do not find any reason to deny the benefit of Cenvat on these items and hold there is no impediment for the goods in question qualifying as inputs / capital goods for Cenvat Credit.

5. The issue, regarding eligibility of CENVAT credit on the disputed goods, has already been settled by this Tribunal in various cases. In the case of CCE&CE Vs. APP Mills Ltd. [2013 (291) ELT 585 (Tri.-Bang.)], this Tribunal has held that MS angles, plates and rounds used for fabricating structural support to plant and machinery used for manufacturing of excisable goods, are integral part of machinery and hence covered under the definition of capital goods. Further, the Tribunal in the case of Shriram Hi-tech Steel & Power Ltd. Vs. CCE, Raipur [2014 (310) ELT 163 (Tri.-Del.)] has held that that MS rounds, MS sheets and CR coils used for making of various machines shall be eligible for CENVAT benefit. In the case of CCE, Raipur Vs. Hi-Tech Power & Steel Ltd. [2015 (315) ELT 428 (Tri.-Del.)], the Tribunal has held that the steel items used in fabrication of coal ground hopper, iron ore ground hopper, coal crusher house, conveyer system, stock house, after burning chamber, kiln coller transformer house, etc. are eligible for CENVAT benefit under the head input definition in Rule 2(k) of CENVAT Credit Rules, 2004.

6. The disputed goods during the material point of time were not covered under the exclusion clause contained in the definition of input. Since the disputed goods are used for erection/fabrication of capital goods only in the plant, the same have the nexus with the manufacture of final product in the factory of the respondent. The definition of input is broad enough to take within its ambit, the goods which are used for or in relation to manufacture of final product either directly or indirectly.

7. In view of the above, I do not find any infirmity in the impugned order passed by ld. Commissioner (Appeals). Thus, the appeal filed by Revenue is dismissed.

[Operative portion pronounced in the open court]

(S.K. Mohanty)

Member (Judicial)

SSK

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