Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. Madras Cements Ltd. Versus CCE, Hyderabad

2016 (6) TMI 761 - CESTAT HYDERABAD

Denial of credit on MS items - Held that:- In India Cements Ltd. Vs. CESTAT, Chennai [2015 (3) TMI 661 - MADRAS HIGH COURT ], the Hon ble High Court of Madras held that credit is admissible on MS items used for fabrication of structural supports. Such supports and fixation is necessary for functioning of the plant/machinery/equipment without movement and vibration without which the process of manufacturing could not be done. Applying the ratio laid in the above hold that the credit on MS items u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of credit as the appellants could avail the credit in the subsequent year. Therefore, the recovery of the irregularly availed credit in excess of 50% (Rs.16,22,615/-) is not justified. Taking into consideration the violation of the provision,it is find that appellants are liable to pay the interest on the irregularly availed credit on capital goods. The contention raised on behalf of appellant is that, the appellants did not utilize the credit availed and therefore there is no interest liabilit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- Enhancement of penalty - Held that:- d. In the instant case, the adjudicating authority has not imposed any penalty for irregular availment of credit on capital goods. If no penalty is imposed, the department has to file an appeal challenging the non-imposition of penalty. Only then can the Commissioner consider whether a penalty not imposed can be imposed. Section 35A does not empower the Commissioner(Appeals) to impose a fresh penalty under the guise of enhancement. The Commissioner(App .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w penalty invoking Section 35A(3). The penalty of ₹ 1,60,000/- imposed by Commissioner(Appeals) invoking Section 35A(3) is beyond his powers and therefore is set aside. - Appeal No. E/237/2012 - Final Order No. A/30120/2016 - Dated:- 19-1-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri R. Parthasarathy, Authorised representative for the appellant Shri H.S. Naskar, Authorised representative for the respondent ORDER [Order per: Sulekha Beevi, C.S.] 1. Brief facts:- The appellants are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

100% credit in the same year on air slide, part of silo feeding arrangement, conveyor, bag divertor, part of roto packer, supply components, parts and accessories of bag filter, hopper etc. which are in the nature of capital goods. The Department observed that these being capital goods appellant ought to have taken only 50% credit of the duty in the year of receipt of goods and remaining 50% ought to have been taken in the subsequent year. A show-cause notice was issued proposing to disallow th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Section 11AC of the Act for irregular availment of credit on steel items. No penalty was imposed by adjudicating authority for irregular availment of credit on capital goods of ₹ 16,22,615/-. 2. Aggrieved by the Order-in-Original, the appellants filed appeal before the Commissioner(Appeals). While this appeal was pending the Commissioner(Appeals) served upon the appellants, a show-cause notice dt. 20/07/2011 invoking Section 35A(3) of Central Excise Act, 1944 as to why penalty should not b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order passed by the original authority and in addition imposed penalty ₹ 1,60,000/- under Rule 15(1) of CENVAT Credit Rules, 2004 for the irregular credit availed on capital goods. Being aggrieved the appellants are before the Tribunal. 3. The learned counsel appearing for appellant submitted that the various parts of packing plant was brought into existence by process of assembling individual components and also using structures fabricated out of iron and steel were required to be fixed i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

440 (Tri. LB)]. That in the case of Mundra Ports & SEZ Ltd. [2015(39) STR 726 (Guj.)], the Hon ble High Court has analysed the issued and held in favour of assessee. That being an interpretational issue no penalty can be imposed for irregular availment of credit on steel items. As regards the credit availed on capital goods, it was argued that the department has merely relied on classification of the goods to categorise them as capital goods. He also submitted that though credit was availed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a new penalty. The Commissioner(Appeals) has ordered that the nil penalty is enhanced to ₹ 1,60,000/-. That this is simply imposing a fresh penalty in the guise of enhancing penalty. He pleaded that the appeal may be allowed. 4. Per contra, the learned AR supported the findings in the impugned order. He submitted that admittedly the steel items were used for support structure, foundation and fixtures of the cement plant. That credit on these steel items is therefore not admissible and the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s and the appellant ought not to have availed 100% credit in the same year. Having contravened the provisions of law, the Commissioner(Appeals) has rightly enhanced the penalty and imposed penalty of ₹ 1,60,000/- for irregular availment of credit on capital goods. 5. I have heard the rival submissions. The first issue is the denial of credit on MS items. The facts brought out from record reveal that MS items were used by appellant for fabrication of support structures. The Department has a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ively. Similar view was taken by the Hon ble High Court in Sai Sahmita Storages (P) Ltd. Vs. CCE, Visakhapatnam, [2011(270) ELT 33 (SP)]. In India Cements Ltd. Vs. CESTAT, Chennai [2015(321) ELT 209 (Mad.)], the Hon ble High Court of Madras held that credit is admissible on MS items used for fabrication of structural supports. Such supports and fixation is necessary for functioning of the plant/machinery/equipment without movement and vibration without which the process of manufacturing could no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m suppliers were erected as such at the respective places by integrating and interconnecting numerous parts / equipments. The usage is detailed as under:- It was seen that there are two SILOS installed vertically into which the Bulk Cement from the tankers is loaded and the Cement travels through AIR SLIDE which is a rectangular box of around 20 ft. length in an inclined position into a BUCKET ELEVATOR . The cement is taken vertically upwards through the Bucket elevator and unloaded into the pac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a POWER TROLLEY is used for dismantling and erection of the equipments, AIR COMPRESSOR, VACCUM PUMPS are used for pneumatic control of loading and unloading of cement and the power supply is drawn through a 1000KVA TRNASFORMER. Entire equipments and the system is monitored electronically through control panels named MCC Panel & PCC panel. 7. The original authority has stated that these items are used as such in the factory, as parts/components of the cement plant/machinery and therefore are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

herefore ordered recovery of 50% of the irregular credit availed along with interest. I am of the opinion that it is only a case of premature availment of credit as the appellants could avail the credit in the subsequent year. Therefore, the recovery of the irregularly availed credit in excess of 50% (Rs.16,22,615/-) is not justified. Taking into consideration the violation of the provision, I find that appellants are liable to pay the interest on the irregularly availed credit on capital goods. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to pay interest on the amount till the date of reversal or if not reversed, till date on which the appellant could have availed remaining 50% credit on capital goods in the subsequent year. 8. The next issue to be addressed is the enhancement of penalty. The Commissioner(Appeals) has imposed penalty of ₹ 1,60,000/- invoking sub-section (3) of Section 35A of the Central Excise Act. The relevant provision is noticed as under:- Section 35A(3) The Commissioner (Appeals) shall, after making su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inion that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, no order requiring the appellant to pay any duty not levied or paid, short-levied or short-paid or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in Section 11A to show cause against the proposed order. 9. The said section speaks about enhancing the penalty already imposed. In the instant case, the adjudicating author .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version