1. The present appeal filed by Revenue is directed against Order-in-Appeal No. MRT/EXCUS/000/APPEALS-I/369/2016-17 dated 03/03/2017 passed by Commissioner of Central Excise (Appeals-I), Meerut. The brief facts of the case are that the respondents were issued with a Show Cause Notice dated 01/07/2014 wherein it was alleged that the respondents had availed Cenvat credit on inadmissible capital goods and on inadmissible input service. It was alleged that the respondents availed Cenvat credit amounting to Rs. 13,90,535/- of Service Tax paid on sales commission paid for sales of Sugar. Further, the respondents had also availed Cenvat credit on various capital goods including Asbestos Sheet/Gasket Sheet, Cable Tray, Jointing Sheet, S. S. Core, Steel Casting, Locktite, Gland Packing, Hex Bolt Nut, Molykete BR 2 Plus, V-Belt, Tool Bit Black, H. R. Plate, Asbestos Packing, Vertical Tank, EPC Switch, BGR Lube Pack, Aluminium Expansion, Plates, Conveyer Belt, H. R. Plate, Nickel Screen, Sugar Screen, M. S. Plate, Steel Wire Rope, Castables, etc. It was also alleged that the said items did not qualify as "Capital goods" and therefore, Cenvat credit of Central Excise duty paid on the same was not admissible. The said issue was decided by Original Authority through Order-in-Original No. 37/ADC/Meerut/2015 dated 19/10/2015. The Original Authority allowed Cenvat credit of Rs. 2,97,882/- and further disallowed Cenvat credit of Rs. 17,95,370/- which included Cenvat credit of Rs. 13,90,535/- availed on input service of sales commission and Cenvat credit of Rs. 1,54,169/- availed on inputs such as H. R. Sheets, Coils, etc. & Rs. 2,50,666/- as credit availed on capital goods. Being aggrieved by the said order, respondent preferred appeal before Commissioner (Appeals). The ld. Commissioner (Appeals) decided the appeal through impugned Order-in-Appeal dated 03/03/2017 wherein the ld. Commissioner (Appeals) allowed Cenvat credit except Rs. 12,752/-. Being aggrieved by the said order, Revenue preferred the present appeal before this Tribunal.
2. The grounds of appeal included that Joint Sheet, S. S. Score, Steel Casting, Locktite, Gland Packing, Molyket BR, Ve-Belt, Took Kit Black, H. R. Plate, Aluminium Expansion, Plates, M. S. Plates, etc. are not covered by definition of capital goods. Further, the grounds of appeal also includes that the services rendered by commission agent are not input service.
3. Heard the ld. A.R. for Revenue, who has presented the grounds of appeal.
4. Heard the ld. Counsel for the respondent, who has submitted that in their own case, this Tribunal through Final Order No. A/70470/2017-EX[DB] dated 08/05/2017 in Appeal No. E/70522/2016-EX[DB] it has been held that Service Tax paid on Sales Commission is admissible as input service Cenvat credit. He has further submitted as follows:-
"1. Gasket sheet/ Asbestor Pltd/ Packing/ Grand packing/ Asbestas PKG-used for packing of pipes and tubes to prevent leakage of gases/steam/juice/syrup/molasses-Credit has been allowed by Commissioner (Appeals) for earlier period in Order-in-Appeal No. 374/CE/MRT-1/2006 dated 11.12.2006
Allowed in (a) U.G. SUGAR & INDUSTRIES LTD V. CCE MERUT-II-2009-245-ELT-515 (TRI)
(b) KCP SUGAR & INDUS. LTD V. CCE-GUNTUR-2004-178-ELT-275 (TRI)
(c) KESAR ENTERPRISES V. CCE-MEERUT II-2005-185-ELT-66 (TRI)
2. Steel wire rope-Used as part of crane for carrying goods /cane from one place to another-Credit has been allowed for the previous period in Order in Original No. 42/ADDL/2006 dated 30.11.2006
- Allowed in CCE V. CESTAT-2014-309-ELT-71 (MAD)
3. Jointing Sheets-used to avoid/prevent leakages of juice/syrup/molasses/hot and cold water etc. from pipe lines/flanges in mill house
- Allowed in UG SUGAR INDS LTD V CCE-2017-347-ELT-491 (T)
4. HT Bolt-used for cutter knives fibrizors to avoid breakage of kinves during cutting of cane-Credit allowed for earlier period vide OIO No. 178/DEM/52/2000-2001, dated 31.10.2011 by Deputy Commissioner.
- Credit allowed in VIKRAM ISPAT LTD V. CCE RAIGAD-2006-206-ELT-958 (TRI)
5. Conveyor Belt-Rubber V Belts-V Belts-used for carrying seeds from drier house to centrifugal and sugar bags from drier house to various go-downs-V-Belt used for driving the motors of centrifugal machines.
- Credit allowed in ULTRA TECH CEMENTS LTD V. CCE-2009-243-ELT-575 (TRI)
6. Nickel Screen/Sugar Screen-used to separate sugar and molasses from B & C massecuites.
- Credit allowed in SHAHABAD COOP-SUGAR MILLS LTD V. CCE-2011-264-ELT-586 (TRI)
Already Board has clarified videTRU, dated 02.12.1996 that parts, components and accessories of capital goods may fall under any chapter heading of the tariff, if they are to be used with capital goods then the same are eligible for credit."
Having considered the rival contentions and on perusal of the facts on record, I find that the ld. Counsel has relied on various earli
Please Login To View The Full Judgment!
er decisions, CBEC Circular & case laws through which the inputs and capitals goods covered by the present proceedings have been accepted as admissible for availment of Cenvat credit. Further, the Cenvat credit of Service Tax paid on Sales Commission is also held to be admissible in respondent's own case. In view of the submissions as indicated hereinabove, I do not find any sustainable ground in the grounds of appeal filed by Revenue. I, therefore, dismissed the appeal filed by Revenue. The respondent shall be entitled for consequential relief, as per law.