Savita Oil Technologies Limited vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. BC/47/BEL/2012-13 dtd. 22/5/2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-III]

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? =======================================================

Savita Oil Technologies Limited : Appellants

VS

Commissioner of Central Excise, Belapur : Respondent

Appearance

Shri Archit Agarwal, C.A. for the Appellants Shri V.K. Shastri, Asst. Commissioner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 2/7/2015 Date of decision: 2/7/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. BC/47/BEL/2012-13 dtd. 22/5/2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-III, wherein the Ld. Commissioner (Appeals) rejected the appeal of the appellant by upholding the order-in-original.

2. The issue involved in the present case is admissibility of the Cenvat credit in respect of steel material such as M.S. Angles, beams, channel, plates etc. falling under chapter 72 used for fabrication/repairs of process storage tank, fabrication/repairs of cooling tower as well as for fabrication/repairs of supporting/utility structures.

3. Shri Archit Agarwal, Ld. C.A. for the Appellant submits that these steel items were used for fabrication and erection of cooling tower and storage tank, therefore the inputs used in the manufacture of capital goods is admissible input. He submits that majority part of the credit pertains to the period prior to 07/07/2009 i.e. prior to amendment of definition of input as provided under 2(k) of Cenvat Credit Rules. He submits that Honble Gujarat High Court in case of Mundra Ports and Special Economic Zone Ltd [2015-TIOL-1288-HC-AHM-ST], Cenvat credit in respect of constructional steel used for construction for erection of capital goods is allowable, it was also held that the amendment on 07/07/2009 cannot be made retrospective, therefore the Vandana Global Ltd. case is now no more applicable for the period prior to 07/07/2009. On the query from the bench regarding evidence of use of the said goods, he submits that they have given C.A. certificate to the appellate authority. On limitation he submits that this Tribunal in various judgments has taken consistent view that in cases of this issue, there were conflicting judgments. There were judgment in favour of the assesee and due to conflict views the case of Vandana Global Ltd. referred to Larger Bench. Therefore the appellant has entertained bonafide belief that credit is legally admissible on these items. Hence there is no suppression of fact on the part of the appellant and extended period is not applicable. He also placed reliance in case of Union of India Vs. M/s. Bharat Aluminum Co. Ltd [2012(26) S.T.R. 101 (Chhatisgarh)].

4. Shri V.K. Shastri, Ld. Asst. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that in the show cause notice, it was categorically stated that steel items on which appellant have availed credit have been used for construction of shed building and foundations and the appellant have not produced any evidence contrary to that fact that they have used this material in fabrication and erection of cooling tower and storage tank etc. It is his submission that since the subject goods have been used in construction of building and factory shed and foundation, the credit is not allowed even prior to the date of amendment. Therefore if material is used for the purpose as stated in the show cause notice credit cannot be admissible. On limitation he submits that as per Honble High Court of Allahabad in case of Commissioner Customs and Central Excise, Ghaziabad Vs. M/s. Rathi Steel and Power Ltd. [2015-TIOL-1416-HC-ALL-CX] even there were conflicting judgment, the fact has to be verified whether the assessee suppressed the fact therefore merely because there were conflicting judgments and confusion, it cannot be said that assessee has entertained bonafide belief.

5. I have carefully considered the submissions made by both sides and perused the record.

6. I observed that in the show cause notice the steel items i.e. M.S. Angles, beams, channel, plates were said to be used for building construction of factory shed, building or foundation etc, if it so then credit cannot be allowed. Submission of the appellant that they have provided C.A. certificate however from the findings of the impugned order which shows that they have not given complete details regarding the use of the steel material and resultant product which is said to have been fabricated out of these steel items, therefore, since, the details of use of the steel items were not before the adjudicating authority, I find that it is a fit case for remand to the original authority to examine the fact in detail regarding the use of the material and thereafter take a decision on the admissibility of the credit. I therefore remand the matter to the original adjudicating authority with the direction to verify the actual use of the material particularly with reference to the claim of the appellant that the materials have been used for fabrication and erection of cooling tower and storage tank, construction of shed and other support structural for erecting capital goods. If it is found correct credit shall be allowed for the period prior to 07/07/2009 in view of Honble Gujarat High Court judgment in case of Mundra Ports and Special Economic Zone Ltd. Appeal is allowed by way of remand.

(Dictated in court)

Ramesh Nair Member (Judicial)

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