M/S Elecon Engg Coltd vs Commissioners Of Central Excise

[ Arising out of OIA-COMMR-A-/109/VDR-I/2011 dtd 17.3.2011 passed by Commissioners of Central Excise, Customs and Service Tax-VADODARA-I]

M/s Elecon Engg CoLtd - Appellant(s)

Vs

Commissioners of Central Excise, Customs and Service Tax-VADODARA-I - Respondent (s)

Represented by :

For Assessee : Shri S R Dixit, Advocate For Revenue : Shri L Patra, Learned Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial)

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 should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial)

Date of Hearing / Decision : 15/5/2015

ORDER No. A/10952 / 2015 dtd 15/5/2015

Per : Mr.P.K. Das,

The appellants were engaged in the Manufacture of Material Handling Equipments classifiable under Chapter No 84 of the Schedule to the Central Excise Tariff Act 1985. They received machineries and availed cenvat credit to the tune of Rs 65,16,704/- which includes cenvat credit of Rs 1,51,715/- availed on the machinery damaged during the transit and the parts were replaced by the supplier. The appellant received insurance claim in respect of the damaged parts. A show cause notice dtd 24.4.2009 was issued proposing denial of cenvat credit of Rs 1,51,715/- alongwith interest and to impose penalty. The Adjudicating Authority confirmed the denial of cenvat credit alongwith interest and imposed penalty. The Commissioner (Appeals) upheld the Adjudication Order.

2. After hearing both the sides and on perusal of the records, I find that the appellant received the machines and availed cenvat credit thereof. It was found that some part of the machine were damaged which was replaced by the supplier. There is no dispute that the appellant availed the credit on the entire machine which was received by them and used in the manufacture of final products. A portion of the parts was replaced cannot be reason for denial of the proportionate cenvat credit on the entire machine which was used in the manufacture of final product, as per provision of Cenvat Credit Rules. The main contention of the Learned Authorized Representative for the Revenue is that they have availed insurance claim in respect of the damaged parts. There is no material available that the appellant claimed insurance claim on the cenvat account. The Learned Advocate for the appellant relied upon the decision of the Honble Karnataka High Court in the case of CCE, Bangalore vs Tata Advanced Materials Ltd - 2011.271.ELRT.62 (Kar.) where it is held that the payment made by Insurance company inclusive of Central Excise duty cannot be denied, on credit claimed by the assessee. He also relied upon the decision of the Tribunal in the case of CCE vs Jindal Vijayanagar Steel Ltd  2006.TIOL.1995. He also pleaded that the demand of cenvat credit is barred by limitation.

3. I find that the denial of cenvat credit is not sustainable on merit. Hence, the impugned order is set aside without going into the issue of limitation. The appeal filed by the appellant is allowed.

(Dictated and pronounced in the Court)

(P.K. Das) Member (Judicial)

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