M/S. Northern Coalfields Ltd vs C.C.E. & S.T. Bhopal
- CitationExcise Appeal No. E/54416/2014-E[SM]
Ratio decidendi
The rule this decision rests on
The definition of "input" under Rule 2(k) of the Cenvat Credit Rules is wide: it covers all goods used in or in relation to the manufacture or production of the final product, save for the goods expressly excluded in the definition. Where an item such as lubricant is not listed among the excluded goods, the restriction on eligibility cannot be read into the definition, and Central Excise duty paid on that item is eligible for cenvat credit. A refund claim that rests on the reversal of cenvat credit made under an audit objection, where the reversal was not required because the item falls within the definition of input, is to be allowed; the denial of such a refund on the ground that the item-using equipment (here, dumpers) is not a capital good under Chapter 87 does not answer the question whether the lubricant itself qualifies as an input.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-In-Appeal No. 000-APP-013-14-15 dated 16.04.2014 passed by Commissioner (Appeals) Bhopal]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, 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. Northern Coalfields Ltd. ...Appellant
Vs.
C.C.E. & S.T. Bhopal Respondent
Appearance:
Mr. Rajeev Kumar Agarwal (CA) for the Respondent
Mr. Pramod Kumar, DR for the Appellants
CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
Date of Hearing.19.06.2015
Final Order No. 53243/2015_
Per S.K. Mohanty:
The brief facts of the case are that the appellant is a producer of coal and is registered with the Central Excise Department. The appellant avails cenvat credit of duties and taxes paid on inputs, capital goods and input services used in or in relation to production of coal. During the period March 2011 to March 2012, the appellant availed cenvat credit of Central Excise duty paid on lubricants used in the dumpers, treating the same as inputs. Taking of cenvat credit by the appellant on the said input item was objected to by the Internal Audit Wing of the Central Excise Department. Immediately the appellant reversed the cenvat credit. Subsequently, the appellant filed the refund application, claiming refund of Central Excise Duty reversed on lubricants on the ground that cenvat reversal pursuant to the audit objection was not proper, because there is no embargo in the definition of input for not extending the credit facility to lubricant. The refund application filed by the applicant was rejected by the authorities below. Hence, the present appeal before this Tribunal.
3. Heard both the sides and perused the records.
4. The refund claim in the present case has been rejected on the sole ground that dumpers falling under chapter 87 of the first schedule to Central Excise Tariff Act, 1985 will only be considered as capital goods for the service providers providing taxable services with regard to specific category of services. According to the Department, since dumpers used by the manufacturer/ producer of excisable goods are not specifically covered in the definition of capital goods, lubricants used in the said ineligible goods will not be entitled for cenvat credit.
5. The submissions of the appellant are that the dumpers have been used within the mining area in or in relation to production of coal. According to the appellant, the input definition contained in Rule 2(k) of the Cenvat Rules is extensive, which take within its ambit all goods (excepting the excluded goods) used in the factory by the manufacturer/producer for the purpose of taking cenvat credit. He further submits since, lubricant is not categorized as the excluded item in the definition of input, denial of Cenvat credit on the same is not proper.
5. I find force in the submissions of the Ld. Consultant for the appellant that the scope of input is very wide and the definition clearly provides all goods used in the factory of the manufacturer/producer shall be considered as input for the purpose of taking Cenvat credit. I find that lubricant is not itemized in the excluded category of goods, for which the definition of input has created the embargo for not extending the Cenvat benefit. Therefore, I am of the considered view that Central Excise duty paid by the appellant on the input i.e. lubricant will be eligible for cenvat credit.
6. In view of above, I do not find any merits in the impugned order, and thus, the same is set aside and the appeal is allowed in favour of the appellant, with consequential relief, if any, as per law.
(Dictated and pronounced in open court)
(S. K. Mohanty)
Member(Judicial)
Neha
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