M/S. Ultra-Tech Cement Ltd vs Commissioner Of Central Excise, Pune

Customs Excise and Service Tax Appellate Tribunal5 May 2015

CitationAPPEAL NO. E/596/12-MUM

Ratio decidendi

The rule this decision rests on

Cenvat credit on welding electrodes used for the repair and maintenance of machinery in the manufacturer's factory is admissible, where the Rajasthan High Court's decision in Hindustan Zinc Ltd. v. Union of India, as affirmed by the Supreme Court, holds such credit available and is binding on the Tribunal in the absence of a contrary binding authority. Where a High Court decision on the point, affirmed by the Supreme Court, is squarely applicable, a contrary decision of another High Court that does not address the position on its facts, or that rests on a finding of fact not made here, cannot be applied in preference to it.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNALWEST ZONAL BENCH AT MUMBAICOURT NO. IIAPPEAL NO. E/596/12-MUM

[Arising out of Order-in- Appeal No. PIII/RS/57/2012 dtd. 28/2/2012 passed by the Commissioner(Appeals- III), Central Excise, Pune]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No 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: seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Ultra-Tech Cement Ltd. : Appellants

Commissioner of Central Excise, Pune : Respondent

Appearance

Shri. Badrinarayan, Advocate for the Appellants Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 5/5/2015 Date of decision: 5/5/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. PIII/RS/57/2012 dtd. 28/2/2012 passed by the Commissioner(Appeals- III), Central Excise, Pune, wherein Ld. Commissioner (Appeals) upheld the Order-in-Original No. 03/R-II/CEX/2011 dated 16/12/2011and disposed of the appeal accordingly. The issue involved in the present case is whether the Cenvat Credit in respect of welding electrodes used for repair and maintenance of machinery is admissible or otherwise.

2. Shri. Badrinarayan, Ld Counsel for the appellant submits that on this issue in their own case this Tribunal vide final order No. A/482-484/15/SMB dated 6/2/2015 held that in view of Honble High Court Judgment in the case of Hindustan Zink Ltd. the Cenvat credit on welding electrodes used for repair and maintenance of machinery is admissible. He further submits that there is no dispute in the fact that welding electrodes on which Cenvat credit was taken by the appellant has been used in the repair and maintenance of machinery. He further placed reliance on following judgments:

(a) CC& CE Vs. Ace Glass Container Ltd. [2013-TIOL-757-HC-UKHAND-CX]

(b) Ambuja Cements Eastern Ltd. Vs. CCE[2010(256) ELT 690(Chhattisgarh)]

(d) UOI Vs. Hindustan Zinc Ltd. [2007(214) ELT 510(Raj.)] affirmed by Suprem Court in UOI Vs. Hindustan Zinc Ltd.[2007(214) ELT A 115 (SC)]

(e) CCE Vs. Hindustan Engg & Industries Ltd. [2011(265) ELT 161 (Cal.)]

He submits that in view of the settled legal position, issue involved in the present case as per the aforesaid judgments credit on welding electrodes used in repair and maintenance of the machinery by the appellant in their factory is admissible.

3. On the other hand, Shri. Ashutosh Nath, Ld. Asstt. Commissioner(A.R.) appearing on behalf of Revenue submits that in view of various contrary judgments Cenvat credit was denied by various forum, some of the judgments relied upon is cited below:

(a) Kisan Sahkari Chinni Mills Ltd. Vs. CCE[2014(313) ELT 768(Tri. Del.)]

(b) Vikram Cement Vs. CCE [2009(242) ELT 545(Tri. Del)]

(d) Sree Rayalaseema Hi-Strength Hypo Ltd. Vs. CCE [2012(278) ELT 167 (A.P.)]

(e) CCE Vs. Sri Vishnu Cements Ltd. [2006(201) ELT (Tri. Bang)]

(f) Jaypee Rewa Plant Vs. CCE.,[2003(159) ELT 553]

4. On careful consideration of submissions made by both sides, I find that much water have been flown on the issue involved in the present case i.e. admissibility of Cenvat Credit in respect of welding electrodes used in the repair and maintenance of the machinery. After going through judgments relied upon by the rivals, I am of the opinion that in view of judgment in the case of Hindustan Zinc Ltd. Vs. UOI 2008(228) ELT 517 (Raj.)] and UOI Vs. Hindustan Zinc Ltd. [2007(214) ELT 510(Raj.)] which was affirmed by Honble Supreme Court reported in .[2007(214) ELT A 115 (SC)]. I am of the view that Cenvat Credit is legally admissible on welding electrodes if it is used for repair and maintenance of machinery. I also considered view taken by coordinate bench of this Tribunal in the appellants own case wherein it was held that the credit on welding electrodes is admissible. As regard the judgments of Jaypee Rewa Plant(supra), Lloyd Metals & Engineers Ltd.(supra), Sree Rayalaseema Hi-Strength Hypo Ltd. supra relied upon by the Revenue on going through the said judgment I find that Jaypee Rewa Plant supra case has been overruled by the Honble Rajasthan High Court in the case of Hindustan Zinc Ltd. Vs. UOI 2008(228) ELT 517 (Raj.)].

As regard judgment on Lloyd Metals & Engineers Ltd.(supra) of Honble Bombay High Court, I observed that the judgment was mainly passed on the ground that assessee could not established ratio of material welding electrodes used for repair and maintenance or otherwise and it is on that fact order was passed therefore ratio of the said judgment cannot be applied. As regard the judgment of Sree Rayalaseema Hi-Strength Hypo Ltd. supra, I observed that in para 2 of the said judgment Honble Andhra Pradesh High Court has distinguished the Rajasthan High court judgment in Hindustan Zink Ltd. on the ground it did not pertain to welding electrodes, which is apparently wrong fact. The very judgment is clearly on the issue of availment of Cenvat Credit in respect of welding electrodes used for repair and maintenance of plant and machinery. Therefore judgment of Honble A.P. High Court in case of Sree Rayalaseema Hi-Strength Hypo Ltd.(supra) can not be applied. In view of the above legal position, I am of the view that judgment of Honble Rajasthan High Court in the case of Hindustan Zinc Ltd. Vs. UOI 2008(228) ELT 517 (Raj.)] and also Suprem Court in UOI Vs. Hindustan Zinc Ltd.[2007(214) ELT A 115 (SC)], which was upheld by the Honble Apex Court are squarely applicable in the present case and considering the same I am of the view that Cenvat credit in respect of welding electrodes used for repair and maintenance of the machinery in the appellants factory is admissible, I therefore allow the appeal.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

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