M/S. Gallant Ispat Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 02-CE/ALLD/2013 dated 13.05.2013 passed by Commissioner of Central Excise (Appeals), Allahabad]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

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

3 Whether Their Lordships wish to see the fair copy of the Order?

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

M/s. Gallant Ispat Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Allahabad

Appearance:

Shri A K Dixit, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 22.1.2015

FINAL ORDER NOS. A/50270-50271 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein Cenvat credit on welding electrodes was denied to them.

2. The facts of the case are that the appellant is manufacturer of MS ingots, steel bars etc. The appellant procured welding electrodes on which Cenvat credit sought to be denied on the premise that these welding electrodes are neither inputs nor capital goods. Therefore, they are not entitled to take Cenvat credit. In reply to the Show cause notice, the appellant submitted that the welding electrodes were used to remove runners and risers from the ingots and sometimes for cutting of steel bars and billets etc. The adjudicating authority also observed in his order that welding electrodes have been used in fabrication /manufacture of capital goods of plant and machinery but the Commissioner (Appeals) gave a finding that department has alleged that during visit to unit the inputs under reference have been found as used for laying the foundation and in making structures in support of capital goods and on such fabrication which is attached or embedded on earth are neither in nature. Thereafter the Cenvat credit on welding electrodes was denied.

3. Heard the parties.

4. Learned Counsel for the appellants have relied on the decisions of Honble High Courts in the case of Hindustan Zinc Ltd. vs. Union of India [ 2008 (228) ELT 517 (Raj)] and Ambuja Cements Eastern Ltd. vs. CCE, Raipur [ 2010 (256) ELT 690 (Chhattisgarh)] in support of contention that they are entitled to take Cenvat credit.

5. On the other hand, learned AR relied on the following decisions:

1. CCE vs. Kichha Sugar Co. Ltd.

[2012-TIOL-855-HC-UKHAND-CX];

2. Sree Rayalaseema Hi-Strength Hypo Ltd. vs. CCE Tirupati [2012 (278) ELT 167 (AP)];

3. Tamil Nadu Newsprint and Papers Ltd. vs. CCE Tiruchirappali [2011-TIOL-1862-CESTAT-MAD];

4. Oswal Opverseas Ltd. vs. CCE Meerut II

[2010 (254) ELT 338 (Tri-Del)];

5. Llyod Metals & Engineers Ltd. vs. Union of India

[2010 (252) ELT 355 (Bom)]

6. CCE Bhubaneswar vs. MSP Steel Pvt. Ltd.

[2009 (248) ELT 845 (Tri-Kol)]

7. CCE, BBSR II vs. ACC Ltd.

[2009 (248) ELT 515 (Tri-Kol)]

8. Steel Authority of India Ltd. vs. Commissioner

[2008 (229) ELT A 127 (SC)];

9. Steel Authroitry of India Ltd. vs. CCE Ranchi

[2008 (222) ELT 233 (Tri-Kolkatta)].

6. I have gone through the records and found that particularly for usage of welding electrodes, in reply to the show cause notice, the appellant has explained their usage which was used in the manufacturing of their final product by removing the runners and risers from the ingots. But these contentions have not been controverted by the Revenue neither in the adjudication order nor in the order of Commissioner (Appeals) to deny Cenvat credit. With regard to other steel items which were embedded to earth but not with regard to welding electrodes. Further, the case law relied upon by the learned AR are not applicable to the facts of this case as in the case of M/s. Kichha Sugar Co. Ltd(supra) and Llyod Metals & Engineers Ltd. (supra), the usage of welding electrodes were not explained, therefore adverse view was taken against the assessee. The decision in the case of Tamil Nadu Newsprint and Papers Ltd. (supra), Oswal Opverseas Ltd. (supra), MSP Steel Pvt. Ltd. (supra), ACC Ltd. (supra) have not considered the decision of Honble High Court of Chhattisgarh in the case of Ambuja Cement Eastern Ltd. . Therefore these case laws cannot be relied upon. Learned AR also relied upon the decision of Sree Rayalaseema Hi-Strength Hypo Ltd. In that case also, the decision of Honble Apex Court in the case of Hindustan Zinc Ltd. was not considered. As in the case of Hindustan Zinc Ltd., the Honble Apex Court held that if welding electrodes have been used for repair and maintenance of plant and machinery, Cenvat credit is available. Therefore, said decision will prevail over the decisions of Honble High Courts. In these circumstances, I hold that appellant is entitled to take Cenvat credit on welding electrodes which have been used in repair and maintenance of their final product. In these circumstances, appeals are allowed.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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