Mani Omega Granites Pvt. Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.E/1043/2004

[Arising out of Order-in-Appeal No.241/2004 CE [SLM] dt. 5.5.2004 passed by the Commissioner of Central Excise (Appeals), Salem]

Mani Omega Granites Pvt. Ltd. Appellant

Versus

Commissioner of Central Excise, Salem Respondent

Appearance:

Shri M.N. Bharathi, Advocate For the Appellant

Shri Balamurugan, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 8.9.2015

FINAL ORDER No.41161/2015

Per R. Periasami

This appeal is filed against the Commissioner (Appeals) order dt. 5.5.2004 contesting only on three items viz. Button Bits (ii) Spares for Excavators (iii) Tyres and Tubes where the benefit of Central Excise Notification No.37/2000 dt. 8.5.2000 in respect of "Button Bits" and Customs Notfn 58/2000 dt. 8.5.2000 was denied by the Commissioner (Appeals).

2. The brief facts of the case are that appellant is a EOU registered with Central Excise. Adjudicating authority demanded duty on various items and also imposed penalty. On appeal preferred by the appellant, the Commissioner (Appeals) in the impugned order allowed exemption notification respect of Kerosene, Diesel, Drill Steel, Drill Rods and rejected credit on Button Bits, Spares for Excavators and Tyres and Tubes and also set aside penalty.

3. Ld. Advocate appearing for the appellants reiterates the grounds of appeal and being a EOU they are eligible for credit on spares and components used for manufacture of final products which are exempted and also allowed to procure the items domestically in CT-3 without payment of duty. He also submits that Notification No.1/95 where similar exemption was granted for goods used in electronic industry. Similarly Notifn 22/2003 wherein under Annexure I to IV of the notification allows exemption for spares and consumables. He also submits that they are being an EOU, entire demand is revenue-neutral where they are eligible to take credit.

4. On the other hand, Ld. A.R appearing for Revenue reiterates the findings of OIA and submits that Notification 58/2000-Cus. is specific to granite industry where a list of items were specified in the notification. The department has rightly denied the exemption claimed by the appellant under consumables and tools as per Sl.No.30 of the Table. The three items under dispute are neither consumables or tools. He submits that LAA has allowed credit on other items figuring in Sl.No.21 the of table. He relied Hon'ble Supreme Court decision in the case of Vanasthali Textiles Industries Ltd. Vs CCE Jaipur - 2007 (218) ELT 3 (SC) where the definition of "consumables" has been clearly defined and the Apex Court ruled that parts cannot be treated as "consumables".

5. After hearing both sides, we find that the limited issue is on the eligibility of Exemption Notification No.58/2000-Cus. dt.8.5.2000 and Central Excise Notfn 37/2000-CE dt. 8.5.2000. We find that Commissioner (Appeals) has allowed benefit of exemption on various items and also waived penalty but rejected only on these three items. On perusal of Notification No.58/2000-Cus. we find that appellant claimed exemption for the items under table Sl.No.30 as Consumables and Tools. Appellant's arguments claiming Notfn 1/95 and 22/03 has been clearly discussed by the Commissioner (Appeals) in her OIA and distinguished clearly where both the notifications 37/2000-CE and 58/2000-Cus. which is specifically meant for granite quarry for quarrying granite by 100% EOU/FTZs where a list of items have been allowed exemption. The description of items have been listed at Sl.No.1 to 29 which are permissible under the notification whereas Sl.No.30 allows "consumables and tools". We are of the considered view that parts of excavator, button bits, tyres and tubes can by no stretch of imagination be considered as consumables. Therefore, appellants are not eligible for spares for excavators, tyres and tubes, button bits. Accordingly, we do not find any infirmity in the order of Commissioner (Appeals) and the same is upheld. Appeal is rejected to the extent of disallowing credit on these three items.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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