M/S Swami Coaches And Eng. Pvt. Ltd vs Cce & St, Chandigarh-Ii

[Arising out of Order-In-Appeal No. 01/CE/Appl/Chd-II/2013 dated 08.01.2013 passed by CCE (Appeals) Chandigarh-II]

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 Swami Coaches and Eng. Pvt. Ltd. ...Appellant(s)

Vs.

CCE & ST, Chandigarh-II Respondent(s)

Appearance:

Mr. J. P Kaushik (Advocate) for the Appellant

Mr. Kanu Verma Kumar DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/ Decision. 11.09.2015

Final Order No. 54088 /2015_

Per S K Mohanty:

This appeal is directed against the impugned order dated 08.01.2013 passed by the Commissioner (Appeals), Central Excise Chandigarh, wherein denial of cenvat credit with regard to the structural items in the adjudication order has been upheld. The brief facts of the case are that during the period February 2008 to January 2010, the appellant took cenvat credit on the items namely, angles, channels, joists, welding electrodes, roofing sheets etc., falling under chapter 72 and 83 of the Central Excise Tariff Act, 1985. During the course of audit, the Central Excise Department observed that those goods will not be considered as capital goods for the purpose of taking cenvat credit. The Show Cause Proceedings initiated in this regard culminated in the adjudication order dated 2.1.2012 wherein, the cenvat credit of Rs. 13,10,235/- has been denied along with interest and also imposed penalty of equal amount of duty on the appellant. The amount of Rs. 1,51,235/- with regard to the roofing sheets was appropriated in the said adjudication order. The adjudication order was upheld by the Commissioner (Appeals). Hence, the present appeal is before this Tribunal.

2. Sh. J. P. Kaushik, the Ld. Advocate appearing for the appellant submits that the disputed goods have been used for fabrication of supporting structure of EOT cranes and other machineries installed in the factory. He further submits that both the authorities have denied the cenvat benefit solely based on the Larger Bench decision of this Tribunal in the case of Vandana Global Ltd. vs CCE reported in 2010 (253) ELT 440, which is no more a good law as per the judgment of Honble Calcutta High Court in the case of Surya Alloys Industries vs UOI reported in 2014 (305) ELT 47 Cal. and CCE vs Rajasthan Spinning & Weaving Mills reported in 2010 (255) ELT 481 (S.C.). Ld. Advocate further submits that the SCN issued on 16.03.2011, seeking denial of cenvat credit taken during the period 2008 to 2010 is barred by limitation of time in view of the fact that the issue arising out of the dispute was a contentious one, which so far has not been settled. To substantiate his stand that cenvat credit cannot be denied on the disputed goods, the Ld. Advocate further relied on the judgment of the Honble Madras High Court in the case of India Cements Ltd. Vs CESTAT, Chennai reported in 2015 (321) ELT 209 Mad. and also the decision of this Tribunal in the case of Commissioner of Central Excise vs APP Mills Ltd. reported in 2013 (291) ELT 585 (Tri-Bang).

3. Per contra, Mrs. Kanu Verma Kumar, the Jt. CDR reiterates the findings recorded in the impugned order and further submits that since the fact regarding taking of cenvat credit was known to the Department upon scrutiny of the records by the Audit Wing, the extended period of limitation has been rightly invoked for confirmation of the Cenvat demand. To justify her said stand, the Ld. Jt. CDR relies on the decision of the Tribunal in the case of Jabalpur Oxygen Company vs CCE reported in 1991 (52) ELT 455 (Tri.).

4. I have heard the Ld. Counsel for both the sides and perused the records.

5. I find from the available records that the disputed goods, namely, angels, channels, joists, welding electrodes have been used by the appellant for erection and fabricating of the capital goods installed in the factory. The cenvat credit attributable to the roofing sheets have been reversed by the appellant consequent upon detection of the fact by the Central Excise Audit Wing. So far as the disputed goods on which the appellant is in appeal before this Tribunal, I find that the cenvat credit has been denied by the Department by relying on the Larger Bench decision in the case of Vandana Global (Supra). The Honble Calcutta High Court in the case of Surya Alloys Industries (supra) have held that the Larger Bench decision in the case of Vandana Global does not hold good because of the subsequent judgment rendered by the Supreme Court. Even after passing of the decision in the case of Vandana Global by the Lager Bench, this Tribunal in the case of APP Mills Ltd. (supra) has allowed the cenvat credit on the disputed goods which were used for fabrication of structural support of machinery by relying on the judgment of Rajasthan Spinning Mills (Supra). In view of the settled position of law, the appellant is entitled for cenvat credit on the disputed goods.

6. Therefore, the impugned order is modified with regard to those disputed goods, namely, angles, channels, joists welding electrodes etc. used in the machineries, cenvat credit would be allowed and penalty is set aside. Since the appellant is not contesting the cenvat credit availed on roofing sheets and during the course of audit the cenvat credit was reversed in the books of accounts, I hold that the appellant is not entitled for the cenvat benefit and the impugned order denying such benefit is legal and proper. The appeal is disposed of in the above terms.

(Dictated and pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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