Maharashtra Seamless Ltd vs Commissioner Of Central Excise, Raigad

(Arising out Order-in-Appeal No. US/211/RGD/2013 dated 29.07.2013 passed by the Commissioner of Central Excise (Appeals), Mumbai II)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial)

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 No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Yes of the Order?

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

Maharashtra Seamless Ltd. Appellant

Vs.

Commissioner of Central Excise, Raigad Respondent

Appearance:

Shri Aparna H., Advocate for the appellant Shri N.N. Prabhudesai, Supdt. (AR) for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial)

Date of hearing : 17-06-2015 Date of decision : 25.06.2015

O R D E R No:..

This appeal is directed against Order-in-Appeal No. US/211/RGD/2013 dated 29.07.2013.

2. Heard both sides and perused the record.

3. The issue involved in this case is regarding whether Cenvat credit of Central Excise duty on round channel, angels, MS beams, MS bars, plates and HR coils etc. are eligible to avail Cenvat credit or otherwise as capital goods. The demand is for the period March 2007.

4. As already recorded, the issue is only for the period March 2007 and undisputedly the credit has been availed on the items mentioned hereinabove as capital goods on the submission that they were used for conveyor, ejector etc. The appellant has been taking up this plea before the lower authorities that items of which Cenvat credit was availed were machinery which were used for the manufacturing of their final product i.e. pipes and coated pipes and for storage of these finished goods.

5. I find from the impugned order that the first appellate authority as on merits held that the issue stands settled by the larger bench of the Tribunal in Vandana Global 2010 (253) ELT 440; it is noticed that the first appellate authority has not considered the various statements made by the appellant as to the use of the products for the manufacture/fabrication of the plant and machinery.

6. The details as given by the ld. counsel as to the consumption of these inputs seem to indicate that the plant and machinery fabricated out of these items can be considered as capital goods. Since the first appellate authority has not given any finding on the submission as to the use as propagated by the appellant, I am unable to go into it. As regards the reliance placed by the first appellate authority on the judgment of Vandana Global Ltd., I find that the said judgment has been impliedly overruled by the Hon'ble High Court of Gujarat in Mundra Ports & Special Economic Zone Ltd. 2015-TIOL-1288-HC-AHM-ST. I respectfully reproduce the said para :

Mr. Y. N. Ravani, learned counsel for the revenue has placed reliance on the decision of the Larger Bench of the Tribunal in Vandana Global Limited Vs Commissioner of Central Excise, Raipur, 2010 (253) E.L. T. 440 = 2010-TIOL-624-CESTAT-DEL-LB. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules 2004 which come into force on 7.7.2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited Vs Union of India and others, reported in (2011) 11 SCC 408 = 2011-TIOL-31-SC-CX would not be applicable to the facts of the instant case.

7. In the case in hand, the entire issue is regarding the eligibility to avail the Cenvat credit which were used as capital goods and which were subsequently held to be not eligible for Cenvat credit as per amendment made in CENVAT Credit Rules, 2004, which came into effect from 07.07.2009.

8. In my considered view, the issue as to how the inputs have been put to use needs reconsidered by the first appellate authority after considering the detail submissions made by the appellant before him.

9. Since the judgment of the Larger Bench has been upturned by the Hon'ble High Court of Gujarat, it is imperative that the first appellate authority considered the issue on merits and passed a speaking order.

10. Accordingly, the impugned order is set aside and the matter is remanded back to the first appellate authority to reconsider the issue afresh after following the principles of natural justice.

11. Appeal allowed by way of remand.

(Pronounced in Court on .)

(M.V. Ravindran) Member (Judicial)

//SR

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