2013 (10) TMI 235 - AT - Central Excise

CENVAT Credit - Aluminium/ Copper coils for the repair of transformers Held that - The demand of the duty on the appellant on the Aluminium/ Copper coils for the repair of transformers seems to be, prima facie, covered by the decision of the Tribunal in the case of CCE, Mangalore vs. KVK Control Panels 2008 (1) TMI 756 - CESTAT, BANGALORE - winding of wire/ coils would not amount an item to be considered as goods within the meaning of Central Excise Act, 1944. - stay granted. CENVAT Credit on Input Services - As regards, the cenvat credit on inputs short received from the job workers - there is no dispute as to the quantity of inputs received back by the appellant being contracted with the job workers - We find strong force in the contentions raised by the learned counsel that if any duty liability that arises due to working on the Copper/ Aluminium coils sent by the appellant, it would be on the job workers and not on the appellant. - stay granted.

Summary

Issues:
1. Waiver of pre-deposit of confirmed duty amounts on captive consumption of parts/components of transformers.
2. Waiver of pre-deposit of confirmed ineligible cenvat credit on copper and aluminium wires sent for job workers but received less.
3. Waiver of pre-deposit of interest and penalty amounts.

Analysis:
1. The appellant filed a stay petition seeking the waiver of pre-deposit of confirmed duty amounts on the captive consumption of parts/components of transformers. The counsel argued that duty liability arises on the consumption of HV/LV Coils used in repairing transformers, which were cleared without payment of duty. The counsel cited precedent cases to support their argument, emphasizing that the winding of coils does not constitute 'goods' under the Central Excise Act, 1944. The departmental representative relied on a different case law to assert that the coils are considered manufactured items. After considering both arguments, the Tribunal found merit in the appellant's case based on the precedent set by the Tribunal in a similar matter.

2. The second issue pertained to the waiver of pre-deposit of confirmed ineligible cenvat credit on copper and aluminium wires sent for job workers but received less. The appellant contended that any duty liability arising from working on the coils sent to job workers should be on the job workers, not on them. They referenced a Tribunal decision to support their stance. The Tribunal agreed with the appellant's argument, noting that there was no dispute regarding the quantity of inputs received back from the job workers as per the contract. Consequently, the Tribunal found in favor of the appellant for the waiver of pre-deposit on this issue.

3. Lastly, the appellant sought the waiver of pre-deposit of interest and penalty amounts. The Tribunal, after thorough consideration of the arguments presented by both sides and the relevant legal precedents, concluded that the appellant had made a strong case for the waiver of pre-deposit of the amounts involved. The Tribunal specifically highlighted the applicability of the precedent set in the case of CCE, Mangalore vs. KVK Control Panels regarding the classification of coils as 'goods.' As a result, the Tribunal allowed the application for the waiver of pre-deposit and stayed the recovery of the amounts until the appeal's final disposal.

In conclusion, the Tribunal granted the appellant's request for the waiver of pre-deposit of the confirmed duty amounts and cenvat credit, along with interest and penalty amounts, based on the arguments presented, legal precedents cited, and the specific circumstances of the case.