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2016 (4) TMI 1191 - CESTAT HYDERABADCenvat credit - Capital goods - Penalty - Time limitation - Held that: - On perusal of the show-cause notice, it is seen that the notice relies upon the ER-1 return and the letter issued by appellant informing the details of credit. There is no evidence for any positive act of suppression or wilful misstatement committed on the part of the appellant. The appellants have disclosed details of the credit availed as required under law. There is no requirement/provision in the ER-1 returns to submit the details of each item on which credit is availed - Except the baseless allegation that appellant did not furnish details of credit in ER-1 returns there is no iota of evidence to prove that appellant is guilty of suppression of facts or wilful misstatement. In the present case the show cause notice itself is based upon the ER-1 returns and details furnished by appellant and not on any private records or other source - Once the assessee files returns, it is for the proper officer to subject the returns to scrutiny and call for clarifications in case of any doubt - On bare perusal of definition of inputs, it can be seen that “input” include goods which are used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. On such score, the contention of the revenue is totally untenable. I do not agree with the contention of Revenue that credit is not admissible as the prefabricated parts are embedded to earth, I am unable to accept the argument of the learned counsel that clean room is an equipment. It may be correct that such a room is indispensible to the process of manufacture, as the appellants are engaged in manufacturing bulk drugs - But no way can a clean room be considered a capital good or component, accessory, or part of capital goods - However as the issue is an interpretational one and as the appellant had revered the credit for the normal period on pointing out by department, even before issuance of show cause notice I hold that no penalty can be imposed for the irregular credit availed on prefabricated building parts. Appeal partly allowed.
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