M/S.Triveni Engineering & Industries ... vs Cce, Meerut-I

[Arising out of Order-in-Appeal No.22-CE/APPL/MRT-I/2014 dated 18.03.2014 passed by the Commissioner of Central Excise (Appeals), Meerut-I]

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.Triveni Engineering & Industries Ltd. Appellant

Vs.

CCE, Meerut-I  Respondent

Present for the Appellant : Shri R.Krishnan, Advocate

Present for the Respondent: Shri G.R. Singh, DR

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

Date of Hearing/Decision: 10.07.2015

Final ORDER NO. __54293-54294/2015___

PER: S.K. MOHANTY

Denial of refund of cenvat credit on welding electrodes by the authorities below, is the subject matter of dispute, in the present appeal.

2. The brief facts of the case are as follows:-

3. The appellants are engaged in the manufacture of sugar and molasses falling under Chapter 17 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants availed cenvat credit of Central Excise Duty paid on welding electrodes by treating the same as inputs. Taking of cenvat credit on welding electrodes was disputed by the Central Excise Department. In appeals for the earlier period, this Tribunal took a view vide orders dated 13.06.2005, 06.01.2006 and 15.01.2008 that the appellants are not eligible for cenvat credit on the said item.

4. Feeling aggrieved with the said order of the Tribunal, the appellants preferred appeals before the Honble Allahabad High Court. Pending final decision, the appellants started depositing the duty under protest for the subsequent period. However, the Tribunal for the subsequent period, vide order dated 28.03.2013 (appeal Nos. E/3304 and 3344/2010-EX.), in the appellants own case held that cenvat credit on electrodes is eligible to the manufacturer. Pursuant to the said favourable order dated 28.03.2013 of the Tribunal, the appellants filed the refund application dated 28.05.2013, claiming refund of cenvat credit already reversed under protest, for the period from September 1999 to March,2000 and April 2000 to March, 2001. The refund application was rejected by the Original Authority on the ground that the Honble Allahabad High Court in Appeal No.391/2005 has passed an interim order on 23rd December, 2005 directing the appellants to pay the adjudged amount with the condition that in case appellants succeed, it shall be entitled to refund of the amount in question alongwith interest.

5. In other words, according to the Original Authority, since the dispute has not been resolved by the Honble High Court and the appeals are still pending, the refund application at this juncture cannot be entertained. The views of the Original Authority were upheld in the impugned order by the ld. Commissioner (Appeals). Thus, this present appeals before the Tribunal.

6. Heard ld. Counsels Shri R. Krishnan for the appellant and Shri G.R. Singh, ld. D.R. for the respondent.

7. The submissions of the ld. Advocate are that the interim order dated 23rd December, 2005 of the Honble Allahabad High Court relied upon in the adjudication order, has application only to the appeals, pending before the Honble High Court. He further submits that the principles of resjudicata, does not apply to the taxing statute. The period for which the refund claim has been lodged, is not covered in the dispute pending before the Honble High Court, and as such the interim order dated 23rd December, 2005 cannot have binding precedent for denial of the refund benefit. It is his further submission that the issue regarding eligibility of cenvat credit on electrodes is no more resintegra in view of the judgment of the Honble Rajasthan High Court in the case of Hindustan Zinc Ltd. vs. Union of India reported in 2007 (214) ELT 510, which has been upheld by the Honble Apex Court by judgment reported in 2007 (214) ELT A-115. He further submits that relying on the above two judgments, this Tribunal in the case of the appellant itself, vide final order No.56117-56118/2013 dated 28.03.2013 has allowed cenvat credit on the disputed goods i.e. electrodes.

8. According to the ld. Advocate, since no appeal has been filed against the order dated 28.03.2013 by the Revenue before the Higher Appellate Authorities, the said order has attained finality with regard to the principle decided therein, and as such, the refund application filed by the appellant merits consideration.

9. Percontra, the ld. D.R. Shri G.R. Singh, appearing for the Revenue submits that welding electrodes is not eligible for cenvat credit, when the said item is used for repair and maintenance of the factory. He further submits that the definition of input provides that the goods which are used for manufacture of capital goods will only be eligible for cenvat credit. According to the ld. D.R., since electrode is not used by the appellant for manufacture of any eligible capital goods, the same cannot be treated as input for the purpose of taking cenvat credit of the Central Excise duty paid thereon.

10. Heard the ld. Counsels for both the sides and perused the records.

11. It is an admitted fact that the appellant has filed the instant refund claim in respect of disputed goods i.e. welding electrodes, on the basis of the favourable decision by this Tribunal in the appellants own case vide order dated 23rd March, 2013. The amount in question, has been paid by the appellant under protest and relates to a subsequent period, which is not under dispute before the Honble Allahabad High Court. In my view, the appellants refund claim cannot be denied, relying upon the interim order of the Honble Allahabad High Court, relating to different period. Thus, the ground taken by both the authorities below for denying the cenvat benefit, is not tenable. It is a settled position of law that the principle of resjudicata is not applicable to the taxing statute. The appellant has complied with the requirements of section 11B of the Central Excise Act 1944 by filing the refund application. The said Refund Application is in respect of a different period, which was filed relying upon the decision in the case of the Hindustan Zinc (Supra), in respect of which no appeal is pending before any appellate authorities. Therefore, I am of the considered view that the appellants applications for refund cannot be denied and thus, the impugned order is set aside. The appeals are allowed in favour of the appellant with consequential relief, if any, as per law.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

Anita

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