2005 JTR(SC) 940
2005 33 AIC 631 ; 2005 AIR(SCW) 5444 ; 2005 186 ELT 266 ; 2005 6 JT 550 ; 2005 6 Scale 1 ; 2005 6 SCC 95 ; 2005 5 SCJ 487 ; 2005 Supp1 SCR 821 ; 2005 2 STT 109 ; 2005 5 Supreme 358
2005(5) Supreme 358
Supreme Court of India
(From Central Excise, Customs and Gold (Control) Appellate Tribunal, New Delhi)
B.P. Singh & S.H. Kapadia, JJ.
M/s. Birla Corporation Ltd. —Appellant
versus
Commissioner of Central Excise —Respondent
Civil Appeal No. 5118 of 2003
(With C.A. Nos. 8268/2003, 4526 and 4527 of 2005)
Decided on 26-7-2005
Counsel for the Parties :
For the Appearing Parties : Rajiv Dutta, Additional Solicitor General, S.K. Bagadia, T.M. Mohammad Yousuf, Sr. Advocates, Praveen Kumar, Rupesh Kumar, Tufail A. Khan, Raghunath Kapoor, Ms. Indu Sharma, P. Parmeswaran, Advocates.
Important point
For ropeway used for transporting crushed limestone from mines located 4 km away from factory to the factory, assessee would be entitled to Modvat credit.
(A) The judgment addresses the applicability of Modvat credit on duty paid for spare parts of a ropeway used to transport crushed limestone from mines to factory premises. While the relevant statutes and sections are not explicitly indexed, the analysis hinges on the interpretation of material handling equipment and the scope of Modvat credit eligibility in the context of factory operations and transportation of raw materials. The tribunals earlier decisions, including J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur-II and CCE, Chennai Vs. Pepsico India Holdings Ltd., which establish that ropeway used for transporting raw material from mines to factory qualifies for Modvat credit, are pivotal to this consideration.
(B) Key legal principles include: determination of whether the transportation equipment falls within the definition of material handling equipment within factory premises, the consistency of tribunal decisions on similar facts, the principle of non-retroactivity of adverse revenue stand, and the binding nature of prior judgments on subsequent identical appeals.
Facts of the case:
The appellant paid duty on spares of a ropeway used to transport crushed limestone from mines located 4.2 kms away to the factory premises. The Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) disallowed Modvat credit on the ground that the ropeway is not material handling equipment within factory premises but a means of transportation. An identical case previously decided by CEGAT in J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur-II, where Modvat credit was allowed, was on appeal not pressed by the revenue authorities and was subsequently dismissed by this Court. The respondent had earlier accepted the principles laid down in Pepsico India Holdings Ltd. case.
Findings of Court:
The Court found that the facts of the instant case are almost identical to those in J.K. Udaipur Udyog Ltd. and Pepsico India Holdings Ltd. The respondent cannot take a different stand after previously accepting the principles. The Court held that Modvat credit is available for the ropeway spares used as transportation equipment from mines to factory, and allowed the appeal.
Issues:
Whether the duty paid on spares of ropeway used for transporting crushed limestone from mines to factory is entitled to Modvat credit.
Ratio Decidendi:
The ropeway used for transporting raw material from mines to factory premises qualifies as material handling equipment within the factory premises, and the principles laid down in prior judgments render the appellant entitled to Modvat credit. The revenue cannot take an inconsistent stand in an identical case.
Result:
The appeal is allowed, the CEGAT order is set aside, and Modvat credit is granted to the appellant for the ropeway spares.
(A) The judgment addresses the applicability of Modvat credit on duty paid for spare parts of a ropeway used to transport crushed limestone from mines to factory premises. While the relevant statutes and sections are not explicitly indexed, the analysis hinges on the interpretation of material handling equipment and the scope of Modvat credit eligibility in the context of factory operations and transportation of raw materials. The tribunals earlier decisions, including J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur-II and CCE, Chennai Vs. Pepsico India Holdings Ltd., which establish that ropeway used for transporting raw material from mines to factory qualifies for Modvat credit, are pivotal to this consideration.
(B) Key legal principles include: determination of whether the transportation equipment falls within the definition of material handling equipment within factory premises, the consistency of tribunal decisions on similar facts, the principle of non-retroactivity of adverse revenue stand, and the binding nature of prior judgments on subsequent identical appeals.
Facts of the case:
The appellant paid duty on spares of a ropeway used to transport crushed limestone from mines located 4.2 kms away to the factory premises. The Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) disallowed Modvat credit on the ground that the ropeway is not material handling equipment within factory premises but a means of transportation. An identical case previously decided by CEGAT in J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur-II, where Modvat credit was allowed, was on appeal not pressed by the revenue authorities and was subsequently dismissed by this Court. The respondent had earlier accepted the principles laid down in Pepsico India Holdings Ltd. case.
Findings of Court:
The Court found that the facts of the instant case are almost identical to those in J.K. Udaipur Udyog Ltd. and Pepsico India Holdings Ltd. The respondent cannot take a different stand after previously accepting the principles. The Court held that Modvat credit is available for the ropeway spares used as transportation equipment from mines to factory, and allowed the appeal.
Issues:
Whether the duty paid on spares of ropeway used for transporting crushed limestone from mines to factory is entitled to Modvat credit.
Ratio Decidendi:
The ropeway used for transporting raw material from mines to factory premises qualifies as material handling equipment within the factory premises, and the principles laid down in prior judgments render the appellant entitled to Modvat credit. The revenue cannot take an inconsistent stand in an identical case.
Result:
The appeal is allowed, the CEGAT order is set aside, and Modvat credit is granted to the appellant for the ropeway spares.
Judgment
B.P. Singh, J.—The short question involved in this appeal is whether the duty paid on spares of ropeway used for the purpose of transporting the crushed limestone from the mines located 4.2 kms. away to the factory, is entitled to Modvat credit.
2. The Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (for short ‘CEGAT’) by its impugned order of 25th March, 2003 disallowed the Modvat credit on the ground that the ropeway transports raw material from the mines to the factory premises and is not a material handling equipment within the factory premises. It is not disputed before us that the crushed lime stone is brought from the mines to the factory premises where it is deposited utilising the ropeway as a means of transportation.
3. An identical issue came up for consideration before the CEGAT, in J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur-II [2001(130) ELT 996. In that case the tribunal held, following the principles laid down in the case of CCE, Chennai Vs. Pepsico India Holdings Ltd. [2001(130) ELT 193], that the assessee was entitled to the Modvat credit. The Commissioner of Central Excise came up in appeal before this Court in Civil Appeal No. 1129/2003 impugning the aforesaid decision of the CEGAT. However, by order dated July 10, 2003 the appeal was dismissed in view of the fact that the learned Attorney General appearing for the Commissioner of Central Excise stated that he did not wish to press the appeal in view of the letter of the Department dated 5th June, 2003. The aforesaid letter reads as follows :
“Please refer to your office letter, dated 2nd May 03 on the above cited subject. In this connection it is to inform you that case of CCE, Chennai Vs. M/s. Peps. Co. India Holdings Ltd. Reported in 2001(42) RLT 800, Final order No. 1581/2000 dated 27.10.2000 in appeal No.E/2603/1998/MAS has been accepted as reported by Chief Commissioner Central Excise Chennai vide his letter C.No.IV/16/16/2003-CZO dated 3.6.03.”
In these circumstances, this Court dismissed the appeal.
4. Learned counsel appearing on behalf of the appellant submitted before us that there are several decisions of the tribunal which have followed the principles laid down in J.K. Udaipur Udyog Ltd. and Pepsico India Holdings Ltd. (supra) and the law is now well settled.
5. In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was thereafter, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. (supra) cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary.
6. We, therefore, allow this appeal and hold that Modvat credit is available to the appellant in the facts and circumstances of the case. This appeal is accordingly allowed. The order of the CEGAT is set aside.
No costs.
C.A.No. 8268/2003
7. In view of the judgment and order passed in Civil Appeal No. 5118 of 2003, this appeal is allowed in the same terms.
No costs.
Civil Appeal No. 4526/2005
[Arising out of SLP (C) No. 737/2004]
Special leave granted.
Heard counsel for the parties.
Respondents waive notice.
8. This appeal is squarely covered by our judgment and order pronounced today in M/s. Birla Corporation Ltd. Vs. Commr. of Central Excise [C.A.No. 5118/2003]. Following the judgment impugned in the aforesaid appeal, the appeal of the appellants herein was dismissed by the tribunal. In view of the fact that we have today allowed the appeal of M/s. Birla Corporation Ltd. in Civil Appeal No. 5118/2003, this appeal is also allowed and it is held that the appellant is entitled to the Modvat credit claimed before the tribunal.
Civil Appeal No. 4527/2005
Arising out of SLP (C) No. 3196/2004]
Special leave granted.
Heard counsel for the parties.
Respondents waive notice.
9. This case is squarely covered by our judgment and order in Birla Corporation Ltd. in Civil Appeal No. 5118 of 2003 pronounced today. Following the judgment impugned in the aforesaid appeal, the CEGAT had dismissed the appeal of the Appellant herein. This Court having allowed the appeal preferred by M/s. Birla Corporation Ltd., this appeal must also be allowed. Accordingly, this appeal is allowed. The judgment and order of the CEGAT is set aside and it is held that the appellant herein is entitled to Modvat credit claimed before the CEGAT in respect of the ropeways and spare parts thereof.
10. No costs.
Appeal allowed.
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