Principal Commissioner Of Central Excise, Gurgaon vs. M/S Honda Motorcycles And Scooters INDIA PVT. LTD.
Original PDF →Facts
The appellant, Commissioner of Central Excise, Gurgaon-II, challenged a decision concerning M/s Honda Motorcycles and Scooters India Pvt. Ltd. The primary dispute revolved around the CENVAT credit of duty paid on materials and capital goods used for the erection and commissioning of paint shops for scooter and motorcycle divisions. The revenue argued that these structures, being immovable property embedded to the earth, were not excisable goods, and therefore, the credit was wrongly taken. The respondent had reversed credit on air conditioners and inputs sent to job workers, which was not pressed by the appellant. The tax period is not explicitly stated. The impugned order or action is not detailed, but it pertains to the denial or challenge of CENVAT credit.
Held
The Court held that the questions of law proposed by the appellant stood finally adjudicated and decided in favour of the assessee by this Court's judgment dated 12.01.2024, in Commissioner, Central Excise Commissionerate, Sonepat (Delhi-III) vs. M/s Ultra Tech Cement Ltd. In that judgment, the Court had relied on decisions of the Chhattisgarh High Court and Gujarat High Court, which held that amendments to CENVAT Credit Rules, 2004, effective from 07.07.2009, operated prospectively. These judgments dealt with structures embedded to the earth and their treatment as inputs for capital goods. The Supreme Court had also dismissed an SLP against a similar decision. Therefore, the issue was settled on merits in favour of the assessee. The Court also noted that it had condoned the delay in filing the appeal, and since no substantial question of law worth examining was left, the appeal was dismissed.
Key Issues
1. Whether CENVAT credit of duty paid on materials and capital goods used for fabrication, erection, and commissioning of paint shops, which are immovable property embedded to the earth and thus not excisable goods under the Central Excise Act, 1944, was wrongly taken and utilized by the respondent. 2. Whether interest at the appropriate rate is leviable on the amount of credit wrongly availed and utilized, and if the respondent is liable for penal action for omission and commission under the Central Excise Act, 1944. Contentions of the Appellant (Revenue): The CENVAT credit on materials and capital goods used for the erection and commissioning of paint shops was wrongly availed as these constituted immovable property and not excisable goods. Consequently, interest and penalties are leviable. Contentions of the Respondent (Assessee): The respondent had reversed credit on air conditioners and inputs sent to job workers, which was not pressed by the appellant. The core issue regarding the paint shops was argued to be settled in favour of the assessee by previous High Court judgments.
Sections Cited
Central Excise Act, 1944, Cenvat Credit Rules, 2004
AI-generated summary — verify with the full judgment below
103
I
Principal Com Gurgaon-II
M/s Honda M CORAM: H
H
Present: HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sunish Bindlish, Sr. Standing Mr. Amrinder Singh, Advocate f
*** RAKASH SHARMA, J.(Oral) The questions of law which have appeal are as under:-
Whether the cenvat credit of and capital goods used fo commissioning of both the paint by virtue of there being immova and ceiling are not excisable g Act, 1944 and the rules made the Traffic Act, 1985, for their scoo wrongly taken and irregularly uti
Whether interest at the appr amount availed wrongly and u hey are liable for penal action commission under the provision and the rules made thereunder? NJAB AND HARYANA ARH CEA-15-2022 (O&M) Date of Decision: 23.09.2024 Central Excise Commisionerate
…Appellant vt. Ltd. …Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH g Counsel for the appellant. for the respondent. ) e been proposed by the appellant f the duty paid on the materials or fabrication, erection and t shops on turn key basis, which able property embedded to earth goods under the Central Excise ereunder and the Central Excise oter and motorcycle plants was ilized by them? ropriate rate is leviable on the utilized irregularly and whether n for their act of omission and of the Central Excise Act, 1944
e t s d h h e e s e r d 4 RAJESH KUMAR 2024.10.04 15:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.
[2]
CEA-15-2022 (O&M)
Learned counsel for the appellant has stated that cenvat credit on air conditioners and on account of inputs sent to job workers not received back within the stipulated time, has not been pressed by the respondent and the same has been reversed. So far as the question of law proposed in relation to credit of materials and capital goods used for the erection and commissioning of the paint shop for scooters division and motorcycles division, we find that the questions of law are only with respect to questions No.1 and 2 alone.
The proposed questions of law, however, stand finally adjudicated and decided in favour of the assessee by this Court vide judgment dated 12.01.2024, in Commissioner, Central Excise Commissionerate, Sonepat (Delhi-III) vs. M/s Ultra Tech Cement Ltd. 2024 (1) TMI 959, wherein, this Court has held as under:- “3. It has been brought to our notice that the decision of the larger Bench of the Tribunal stands reversed by the Division Bench of the Chhattisgarh High Court in [Vandana Global Ltd. vs. Commissioner of Central Excise, Raipur, 2018 (16) GSTL, 462] while placing reliance upon the judgment of the [Gujarat High Court in Mundra Ports & Special Economic Zone Ltd., vs. Commissioner, 2015 (39) STR 726 (Guj.)] and also in [Thiru Arooran Sugars vs. CESTAT, Chennai, 2017 (355) ELT 373 (Mad.)]. The view taken as such was that the amendment could only operate prospectively which was made in the Cenvat Credit Rules, 2004 which came into force from 07.07.2009 and in such circumstances the benefit had been granted regarding the issue of the structures which are embedded to the earth and whether the structures were to be treated as inputs used in final products as input for capital goods. Out of the said judgment of the [Chhattisgarh High Court, SLP (Civil) Diary No.20723/2018, Commissioner, RAJESH KUMAR 2024.10.04 15:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.
[3]
CEA-15-2022 (O&M)
Customs and Service Tax (CGST) vs. M/s. Shri Nakoda Ispat Ltd.] through its Authorised Person was preferred, which was dismissed on 12.07.2018. 4. Resultantly, we are of the considered view that even on merits as such, the issue has been settled in favour of the assessee and, therefore, we do not feel that in the present case, the issue of limitation and whether there is any suppression as such needs to be gone into, as argued by counsel for the Revenue since on merits the issue stands decided against it.”
In the aforesaid judgment, this Court has rejected the appeal on limitation. However, since we have already condoned the delay, we would not dismiss the appeal on limitation. As no substantial question of law worth examining left in the present appeal, the same is accordingly dismissed.
All pending applications also stand disposed of accordingly.
(SANJEEV PRAKASH SHARMA) JUDGE
(SANJAY VASHISTH)
JUDGE 23.09.2024 rajesh
Whether speaking/reasoned? : Yes/No 2. Whether reportable?
: Yes/No RAJESH KUMAR 2024.10.04 15:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.
Reproduced from the public record of the Punjab and Haryana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.