M/S.Northern Coalfields Ltd vs C.C.E. & S.T., Bhopal

[Arising out of Order-in-Appeal No.BPL-EXCUS-000-APP-079-14-15 passed by the Commissioner (Appeals), Customs, Central Excise and Service Tax, Bhopal]

For approval and signature:

HONBLE 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

Present for the Appellant : Shri Rajiv Agarwal, C.A.

Present for the Respondent: Shri.D. Singh, D.R.

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 06.07.2015

FINAL ORDER NO. 54041/2015

PER: S.K. MOHANTY

Denial of cenvat credit on lubricant oil used in dumpers and water sprinkler is the subject matter of present dispute. Shri Rajiv Agarwal, the ld. Consultant appearing for the appellant submitted that lubricant is used in heavy earth moving machines, which are used for production of coal. That unless the machines are lubricated with lubricants, heat would be generated in the process of mechanical fiction between the working surfaces of the machinery, leading to adverse consequences, affecting the process of manufacture. With regard to water sprinklers, the ld. Consultant submitted that the Mines Act and the Central Pollution Act provides for prevention of pollution within the mining area and for the said purpose, the appellant used such machines where lubricant is used for proper functioning. Thus, according to the ld. Consultant, since the water sprinkler has been used for controlling pollution within the mining area, the same should be considered as either inputs or capital goods and duty paid lubricant used therein should be available for cenvat benefit.

2. On the other hand, Shri D. Singh, the ld. D.R. appearing for the respondent reiterated the finding recording in the impugned order.

3. It is not in dispute that heavy earth moving machines are used in the production of coal and for proper functioning of the said machine, the appellant used lubricant. Since the disputed goods are used in or in relation to production of excisable goods, I am of the view that the said goods fall under the purview of the definition of input for availment of cenvat credit. Further, lubricant used for smooth functioning of water sprinkler, which is used for controlling pollution in the mining area as per the requirement of mines Act, in my opinion, will also qualify as input for the purpose of cenvat benefit. The definition of input contained in Rule 2 (k) of the Cenvat Credit Rules, 2004 entitles a manufacturer to take cenvat credit on all goods except the excluded goods itemized there in. Since lubricants are not falling under the negative list of goods mentioned in the definition clause, credit cannot be denied to the appellant.

4. Therefore, I do not find any merits in the impugned order, and thus, allow the appeal in favour of the appellant.

[Operative part of the order Pronounced in the Open Court]

(S.K. MOHANTY)

MEMBER (JUDICIAL)

Anita

??

??

??

??

0 2