M/S. Glaxosmithkline Consumer ... vs C.C.E. & S.T. Chandigarh

[Arising out of Order-in-Original No. 13-15/CE/APPL/CHD-II/2013 dated 11.01.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chandigarh].

For approval and signature:

Honble Shri 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. Glaxosmithkline Consumer Healthcare Ltd.

.Appellants

Vs.

C.C.E. & S.T. Chandigarh .Respondent

Appearance:

Shri Anurag Kapoor, Advocate for the Appellants

Ms. Ranjana Jha, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 13.05.2015

FINAL ORDER NO. 51619-51621/2015-EX(SM)

Per Ashok Jindal:

The appellants are in appeals against the impugned orders denying the Cenvat Credit on steel items namely MS sheet, MS coils etc. on the premises that these items do not qualify as input / capital goods as per Rule 2 of the Cenvat Credit Rules 2004.

2. The facts of the case are that appellant is a manufacturer of malt products and procured these steel items with prior intimation to the department that they are procuring these items to get MS plate fabricated from the fabricator which shall be used by them in process of manufacturing of their final product vide letter dated 24.03.2006 and thereafter the appellant has taken the Cenvat Credit on these items. An audit was conducted and it was found that appellant has taken Cenvat Credit on these items. Therefore, show cause notice was issued to the appellant as these items are neither capital goods nor input. Therefore, appellant is not entitled to take Cenvat Credit on these items. Both the lower authorities confirmed the demand on the premises that appellant has not produced any evidence on record regarding usage of these items as input / capital goods in their factory. Aggrieved from the said orders appellant is before me.

3. The Ld. Counsel for the appellant submits that before taking Cenvat Credit they have duly informed to the Department that they are availing Cenvat Credit on these items and these items have been used for specific purpose i.e. MS Tray which shall be used for further manufacturing of final product. In reply to the show cause notice the appellant has also given detailed chart of usage of the items. That has not been disputed and without giving any finding on this Cenvat Credit has been denied. Therefore, impugned orders are required to be set aside.

4. On the other hand Ld. AR strongly oppose the contention of the Ld. Counsel and submits that the appellant has failed to produce any evidence on record regarding usage of these items for fabrication of capital goods. Moreover, as per rule 9(5) of the Cenvat Credit Rules, 2004 burden of proof lies on the appellant which appellant has failed to do so and appellant has never produced job worker challan before the lower authorities. So they have correctly denied the Cenvat Credit.

5. Heard the parties. Considered the submission.

6. In this case before taking the Cenvat Credit on these items appellant has intimated to the department that they are procuring MS sheets / coils for fabrication of MS Trays through job worker which will ultimately be used for manufacturing of final product. The said letter is on record and same has not been disputed by the Revenue. Further, appellant has produced a detailed chart on usage of the items before the lower authorities but without commenting on the documents they have simply denied Cenvat Credit to the appellant. As the appellant has shown that these items have been used by them appellant has already intimated to the department regarding usage of the items in dispute for fabrication of MS trays which is ultimately used by them for manufacturing of their final product. The burden lies on the revenue to prove that the appellant has not used the items for intended purpose which revenue has failed to do so. In these circumstances, the documents produced by the appellant are sufficient to avail Cenvat Credit.

7. In these circumstances, I hold that appellant has correctly taken the Cenvat Credit on these items as these items have been used by them for fabrication on MS Trays (capital goods) which are ultimately used for manufacturing of final product.

7. In these circumstances impugned order deserves no merits. Hence same is set aside. Appeals are allowed with consequential relief if any.

(Dictated and pronounced in the open court.)

(Ashok Jindal) Member (Judicial)

Bhanu

4

E/56882-56884/2013-EX(SM)