2017 (9) TMI 1054 - AT - Central Excise

CENVAT credit - railway construction materials and wagons which were used to maintain railway tracks and for transportation of raw materials, finished goods within the factory premises, respectively - Held that - the identical issue pertaining to the Railway track came before the Tribunal in the case of assessee, Tata Steel Ltd. vs. Commr. Of Central Excise, Jamshedpur 2016 (1) TMI 1059 - CESTAT KOLKATA , where the cenvat credit was allowed on railway track material used for handling raw materials, process goods - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Department's appeal against Order-in-Original dated 31.03.2013
- Assessee's cross-appeal against the same impugned order
- Claim of cenvat credit on railway construction materials and wagons
- Use of wagons for transportation of raw materials within the factory premises
- Use of railway track materials for transportation of raw materials and finished goods within the factory premises

Analysis:
The judgment involves multiple issues related to the department's appeal against Order-in-Original dated 31.03.2013 and the cross-appeal filed by the assessee against the same impugned order. The case revolves around the claim of cenvat credit on railway construction materials and wagons used by the assessee during the period from July 2009 to September 2012. The assessee availed cenvat credit on wagons used for transportation of raw materials within the factory premises, citing a Tribunal decision in a similar case. The department challenged this claim, leading to the appeals.

During the proceedings, both parties presented their arguments, and after careful consideration and perusal of the records, the Tribunal found that similar issues regarding the use of railway track materials had been addressed in previous cases. The Tribunal referred to the decisions in the cases of Tata Steel Ltd. and Jayaswal Neco Ltd., where cenvat credit was allowed on railway track materials used for handling raw materials and process goods. The Tribunal highlighted the observations made by the Hon'ble Supreme Court in the Jayaswal Neco Ltd. case, emphasizing the integral role of railway tracks in the manufacturing process.

The Tribunal noted the detailed process involved in the use of railway tracks for transporting hot metal, raw materials, and finished products within the factory premises. It emphasized that the use of railway tracks was essential for the manufacturing process and constituted an integral part of the production activities. The Tribunal found that the Commissioner had erred in denying the relief based on extraneous grounds and upheld the use of railway tracks as a legitimate claim for cenvat credit.

Based on the precedents and legal principles established in previous cases, the Tribunal dismissed the appeals filed by the department, as they lacked merit. Additionally, the cross-appeal filed by the assessee was allowed in line with the findings related to the use of wagons and railway track materials within the factory premises. Consequently, the appeals filed by the department were dismissed, and the appeal filed by the appellant was allowed, as per the detailed analysis and reasoning provided in the judgment.