Goodyear India Ltd. Vs Commissioner of Central Excise (CESTAT Chandigarh)
No cenvat credit on Inputs or Capital Goods could be denied merely for showing Tubes and Flaps separately in Invoices
Conclusion: Cenvat Credit on Input or Capital Goods could not be denied merely for showing tubes and flaps separately in invoices. Moreover, tubes and flaps were used in the manufacture of the tyres and as such qualify to be “inputs” given the definition given under Rule 2(k) of CCR, 2004.
Held: Assessee was engaged in the manufacture of tyres. It purchased tubes and flaps from other manufacturers and cleared the same along with the tyres to the original equipment manufacturers and overseas purchasers and had availed CENVAT credit on the said tubes and flaps which was disputed by the Department by issuing a show-cause notice covering the period from March 2006 to January 2011. The said show-cause notice was adjudicated vide impugned order wherein the demand of CENVAT Credit of Rs.2,97,33,358/- was confirmed along with equal penalty. Assessee submitted that the denial of CENVAT credit on tubes and flaps was not correct as the same was covered under the definition of “Input” under Rule 2(k)(i) of CCR, 2004; in the industry, tyres, tubes and flaps was known as set packing for readymade fitment in vehicles; thus, the tubes and flaps were covered under the ambit of “all goods used in or about the manufacture of final products”; in addition, they could also be treated as “accessories” and either way, credit was admissible. Department argued that assessee had not declared their intent to use the tubes and flaps as inputs in the respective declarations, moreover, assessee supplied wrong data of CENVAT credit taken on flaps and tubes, which was found incorrect during the audit and this amounted to suppression of fact and therefore, extended period was invocable. The issue involved in the case was whether assessee were eligible for CENVAT credit, on the flaps and tubes supplied along with tyres cleared by them in a set packing. It was held that the decision of the Tribunal as well as of the High Court of Rajasthan in the case of the assessee itself holding that CENVAT credit on duty paid tubes and flaps as accessories of manufactured tyres was admissible, was binding on us. Therefore, the issue had been held in favour of assessee. Department’s objection that the assessable value of tubes and flaps was separately shown in the invoices and therefore, CENVAT credit was not available, was not acceptable in view of the various decisions.”
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The appellants, M/s Goodyear India Limited, are engaged in the manufacture of tyres; the appellants purchased tubes and flaps from other manufacturers and clear the same along with the tyres to the original equipment manufacturers and overseas purchasers; the appellants have availed CENVAT credit on the said tubes and flaps which is disputed by the Department by issuing a show-cause notice dated 04.04.2011 covering the period from March 2006 to January 2011; the said show-cause notice was adjudicated vide impugned order dated 10.05.2012 wherein demand of CENVAT Credit of Rs.2,97,33,358/- was confirmed along with equal penalty; penalty was also imposed on Shri Yashwant Singh and Shri R.K. Gupta, the Directors of the Company; therefore, M/s Goodyear and the other two Directors are in appeal before us. All the appeals are taken up together for discussion and consideration.
2. Shri B.L. Narasimhan, assisted by Ms. Krati Singh and Mr. Aman Singh, learned Counsel appearing for the appellants, submits that denial of CENVATA credit on tubes and flaps is not correct as the same are covered under the definition of “Input” under Rule 2(k)(i) of CCR, 2004; in the industry, tyres, tubes and flaps is known as set packing for readymade fitment in vehicles; thus, the tubes and flaps are covered under the ambit of “all goods used in or in relation to manufacture of final products”; in addition, they can also be treated as “accessories” and either way, credit is admissible. Learned Counsel submits that the Department has not appealed against the order dated 28.11.2017, for the subsequent period, passed by Commissioner (Appeals) in their favour. Department cannot take different stand for different periods. He also submits that in number of cases, the issue stands decided in favour of the appellants.He submits that the Commissioner has relied upon the decision of Hon’ble Kerala High Court in the case of Apollo Tyres- 2010 (259) ELT 194 (Ker.). However, the said decision of Hon’ble Kerala High Court has been stayed by the Hon’ble Apex Court 2014 (310) ELT A153 (SC).He relies on the following cases in support of his contentions:
