GNFC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, VADODARA

JUDGEMENT

(1.) DURING the course of verification of examination of duty paying documents evidencing payment of central excise duty in respect of capital goods and availment of the same as cenvat credit, it was felt that appellant had wrongly taken cenvat credit in respect of several capital goods during the period September 1999 to November 2003 and proceedings were initiated. This is the second round of litigation. The impugned order has been passed consequent to directions of this Tribunal in the Order No. A/1440/WZB/AHD/2008, dated 24 -7 -2008 [2008 (232) E.L.T. 850 (Tri. -Ahmd.)]. Out of the several capital goods on which credit had been disallowed earlier, after the remand proceedings, there is only one item in dispute and credit has been disallowed on this item. This item is empty chlorine cylinder.

(2.) HEARD both the sides.

(3.) LEARNED counsel on behalf of the appellants submitted that the Tribunal had given very clear directions in the remand order in paragraph 7.4 which is applicable to empty chlorine cylinder. However, both the authorities have not considered the issue as per the directions of the remand at all. He submits that appellant is using the empty chlorine cylinder for not only transportation of chlorine but the same cylinder after receipt in the factory is connected to the machine and chlorine is fed from the very same cylinder till the same gets empty. Therefore the cylinder is not only used for transportation of cylinder but also for storage within the factory and it is an accessory to the machine for production since chlorine is fed from the cylinder directly. He relies on the decision of the Larger Bench in the case of Banco Products (India) Ltd. v. C.C.E., Vadodara reported in 2009 (235) E.L.T. 636 (Tri. - LB.) wherein a view was taken that cenvat credit of duty paid on plastic crates is admissible by treating the same as input or capital goods. A view was taken that plastics crates can be considered as accessories of the machine. Further, he also relies upon the decision of the Tribunal in the case of C.C.E., Surat v. Mangalam Rasayan P. Ltd. reported in 2007 (219) E.L.T. 957 (Tri. - Ahmd.) there also a view was taken that modvat credit on chlorine toners is eligible. In that case also it was submitted that a pipe was connected to the toner to fill the toner and therefore toner is eligible. The learned A.R. however submits that the Tribunal in the remand order had directed the lower authorities to consider whether the chlorine cylinders were used as storage tank or not and he drew my attention to the show cause notice wherein it has been clearly stated that cylinders were being used for transportation. In view of this fact wherein it has been shown that the cylinders are used only for transportation, the denial of credit by the lower authorities on the ground that chlorine cylinders received in May 2000 would not be eligible for cenvat credit is correct and in line with the directions in the remand order.