Ultratech Cements Ltd VERSUS   C.C.E. & S.T.-Rajkot

Customs, Excise & Service Tax

 Appellate Tribunal West Zonal

Bench At Ahmedabad

 

REGIONAL BENCH-COURT NO. 3

Excise Appeal No. 13677 of 2013- DB

(Arising out of OIO-82-COMMR-2013 dated 31/07/2013 passed by Commissioner of Central Excise and Service Tax-RAJKOT)

 

Ultratech Cements Ltd

VERSUS

 

C.C.E. & S.T.-Rajkot

 

APPEARANCE:

Shri, Ishan Bhatt, Advocate appeared for the Appellant

Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON’BLE MEMBER (TECHNICAL), MR. C.L.MAHAR

 

Final Order No. 11642/2023

DATE OF HEARING: 18.07.2023 DATE OF DECISION: 02.08.2023

RAMESH NAIR

 

The issues involved in the present case are that:

 

• Whether the Cenvat Credit availed on items like S. Beams/Angles/Channels/Flats/Joists etc. claimed to have been used in

the fabrication of plant and machinery in the factory during January 2008 to April 2010 is eligible.

• Whetherextended period of limitation could be invoked in the facts of the present case.

 

2. Shri Ishan Bhatt, Learned Counsel appearing on behalf of the appellant submits that Iron, Steel items in question having used in the fabrication of plant and machinery in the factory, the same is supported by Chartered Engineer’s Certificate dated 25.06.2013. He submits that the showcause notice wrongly alleges that the iron, steel items were used in

 

civil construction. Whereas, the impugned order has confirmed the demand on the ground that iron, steel items were used in fabrication of items, which was further used as supporting structure of plant and machinery. Both the show cause notice and impugned order have not provided on any basis for such contrary allegation/finding. It is now settled law that Cenvat credit is eligible on iron, steel items used in the fabrication of plant and machinery in the factory irrespective of whether the plant and machinery is embedded to earth.

 

• He submits that the chartered engineer’s Certificate dated 25.06.2013 provides the list of items which have been fabricated using the disputed iron steel items on which credit was availed. These items include belt conveyors, cable gallery, cement mill hopper, clinker cooler, compressor house, tower crane, raw materials hopper, boiler and other machinery which is essential for manufacturing activity in the plant of the

 

• He also refers to a summery table, wherein he pointed out that allthe materials have been used in the machinery equipment fabricated in the factory. Therefore, all the items falling under chapter 84 or 85 of the first schedule of Central Excise Tariff Act, 1988 clearly falls under the definition of the Capital Goods under Rule 2(a)(A)(i) of the Cenvat Credit Rules, 2004. Accordingly, the iron and steel items under dispute satisfied the definition of inputs in as much as they have been used in the manufacture of capital goods, which are further used in the factory of the manufacturer, as provide in Explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2004.

 

• Notwithstanding the above, he submits that the show cause notice and impugned order are contradictory to each other since the show cause noticealleged that the iron and steel items were used for civil construction

 

purposes and repairs. Whereas the Learned Commissioner in the impugned order has held that the iron steel and items were used for fabrication of items, which were further used as supporting structures for plant and machinery embedded to earth.

 

• He further submits that the major period is prior to 07.07.2009 whereby the Explanation 2 to Rule 2(k) of Cenvat Credit Rules, 2004 was inserted,therefore, prior to this date there should not be any dispute about the admissibility of the Cenvat credit.

 

• Without prejudice to the above submission, he further submits that extended period of limit cannot be invoked in the present caseas the entire demand is beyond the normal period of limitation. It is an admitted fact in the show cause notice that the demand arises from the scrutiny of ER-1 returns filed by appellant for the month of March 2010. A majority of credit sought to be denied was availed prior to the amended provisions. Thus the actions of the appellant are completely bonafide in nature and there is no question of any fraud suppression or willful mis-statement in the facts of the present case. In support of his above submissions on merit as well as time bar, he placed reliance on the following judgments:
  • HILLimited Vs CCE 2023 (4) TMI 428-CESTAT Ahmedabad
  • CCE& ST, Rajkot  Sanghi Industries Ltd. 2022 (5) TMI 475 (Tri. Ahm)
  • SanghiIndustries  v. CCE & ST, Kutch 2017 (10) TMI 330 (Tri. Ahm)
  • CCE,Lucknow  Mankapur Chini Mills 2019 (367) ELT 889 (All)
  • MundraPorts & Special Economic Zone  v. Commissioner 2015

(39) STR 726 (Guj.)

• IndiaCements Ltd.  CESTAT Chennai 2015 (321) ELT 209 (Mad.)
• ManglamCement  v. CCE, Jaipur-1 2018 (360) ELT 737 (Tri. LB)
• CCE,Raipur  Hira Ferro Alloys Ltd 2016 (342) ELT 434 (Tri. Del.)
• CCE,Raipur  Topworth Steels (P) Ltd. 2018 (15) GSTL 383 (Tri. Del.)
• SinghalEnterprises  Ltd. 2016 (341) ELT 372 (Tri. Del.)

 

• Vodafone Mobile Services Ltd. v. CCE & ST, Delhi 2019 (27) GSTL 481 (Del.)
• BhartiHexacom  v. CCE, Jaipur-1 2021 (52) GSTL 62 (Tri. Del.)
• ThiruArooran Sugars  CESTAT Chennai 2017 (355) ELT 373 (Mad.)
• BirlaCorporation  v. CCE 2005 (186) ELT 266 (SC)
• Vandana Global Limited Vs Commissioner, Central Excise and Customs, Central Excise 2018 (5) TMI 305 (Chhat.)
• Commissionerof CGST & Central Excise Lucknow DSCL, Sugar, Rupapur District Harodi, U.P 2019 (6) TMI 199 (All.)
• TamilnaduNewsprint & Papers  Vs The Commissioner of Central Excise 2021 (3) TMI 179 (Mad.)
• The Commissioner of Central Excise Vs Madras Cements Ltd 2019 (7) TMI 460 (Mad.)
• Dalmia Cements (Bharat) Ltd. Vs CESTAT, Chennai 2016 (341) E.L.T. 102 (Mad.)
• Of C.Ex., Visakhapatnam-II Vs Sai Sahmita Storages (P) Ltd. 2011 (270) E.L.T. 33 (A.P)
• SLR Steel Ltd. Vs Commissioner of C.Ex., Banglore-II 2010 (249) ELT. 394 (Tri-Bang)
• Commissionerof Central Excise, Banglore-II Vs SLR Steel  2012

(280) E.LT. 176 (Kar.)

• AmbujaCement  Vs Commissioner CE & ST (LTU) Mumbai Final Order dated. 03/03/2022
• AmbujaCements  Vs Commissioner of Central Excise & Service Tax Final Order dated. 01/12/2021
• AmbujaCements Ltd Vs Commissioner CE & ST (LTU) Mumbai Final Order dated 21/02/2022
• Commissionerof Commercial Tax, Lucknow  Ambuja Cement Ltd. 2018 (8) GSTL 161 (All)

 

 

3. Shri Tara Prakash,Learned Deputy Commissioner (AR), appearing on behalf of the revenue reiterates the findings of the impugned order.

 

4. On careful consideration of the submission made by both the sides and perusal of record, we find that there are number of discrepancies/ contradictions between the show cause notice and adjudication order such as,in the show cause notice the Cenvat credit was proposed to be denied

 

on the ground that the goods were used in the construction. However, in the impugned order though it was admitted that the goods were used in fabrication of machinery but the same was denied on the ground that these machineries are embedded to earth.

 

• We also find that the Adjudicating Authority has not appreciated in proper perspective, regarding the use of the goods in the machineries equipments fabricated by the appellant. After passing of the adjudication order much water has flown on this issue and various judgments were passed by various forums. Therefore, we are of the considered view that the entire matter needs reconsideration in the light of the facts of the present case vis-a-vis the law in terms in various judgments of the High Courts/ Tribunals. All the issues are kept open.

 

5. Impugned order is set aside appeal is allowed by way of remand to Adjudicating Authority for passing a fresh order after compliance of the principles of natural justice. Since the matter is of 2008-10, the adjudicating authority shall pass a de-novo order within a period of three months from the date of this order.

(Pronounced in the open court on 02.08.2023)

 

RAMESH NAIR MEMBER (JUDICIAL)

C.L.MAHAR MEMBER (TECHNICAL)