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2015 (10) TMI 282 - AT - Central ExciseDenial of CENVAT Credit - whether CENVAT credit of duty paid on Trolleys, used in the assembly line of ACs, is admissible to the appellant or not - Held that - Trolleys, for which cenvat credit is taken, are used by the appellant for carrying material from one part of the assembly line to another part of the assembly line or the place to and from where assembly of goods is taking place. It has been held by the Larger Bench in the case of Banco Products (India) Limited vs. CCE, Vadodara (2009 (2) TMI 101 - CESTAT AHMEDABAD) that credit of Plastic Crates used for handling of materials within the factory is admissible for credit under Rule 2 (b) of the Cenvat Credit Rules, 2002 presently Rule 2(a) of Cenvat Credit Rules, 2004. The nature of function attributable to the Plastic Crates and Trolleys used by the appellant are the same. The case law Commissioner of Pondicherry vs. Mohan Brewaries Limited (2010 (8) TMI 281 - MADRAS HIGH COURT) has been relied upon by the Revenue. The issue in this case relied upon by the Revenue was cenvat credit of duty paid on steel plates and M.S. Channels used for fabrication of Chimney. The facts involved in that case were different and, therefore, it was not be proper on the part of the first appellate authority to distinguish the Larger Bench judgment in the case of Banco Products (India) Limited vs. CCE, Vadodara (supra) as the facts and nature of equipment involved in the present proceedings are similar. Therefore, cenvat credit is admissible to the appellant. - Decided in favour of assessee.
Issues involved:
Admissibility of CENVAT credit on Trolleys under Chapter 87 of Central Excise Tariff Act, 1985 used in the assembly line of ACs. Analysis: Issue 1: Admissibility of CENVAT credit on Trolleys The appellant argued that Trolleys used in the assembly line are essential for manufacturing activity, citing the Larger Bench decision in Banco Products (India) Limited vs. CCE, Vadodara. The appellant contended that Trolleys are comparable to Plastic Crates, which were deemed eligible for CENVAT credit in the Larger Bench judgment. The appellant also referenced the case law of PKPN Shipping Mills (P) Limited, where the Madras High Court held that CENVAT credit on Plastic Crates is admissible. The appellant maintained that Trolleys should be considered similarly. Issue 2: Revenue's argument The Revenue argued that Trolleys used in the assembly line of ACs are classified under Chapter 87 of the Central Excise Tariff Act, 1985 and cannot be classified as capital goods or inputs. They cited the case of Commissioner of Pondicherry vs. Mohan Brewaries Limited, where it was held that certain materials used for fabrication are not entitled to modvat credit. Judgment After hearing both sides and examining the case records, the Tribunal considered whether CENVAT credit on Trolleys used in the assembly line of ACs is admissible. Referring to the Larger Bench decision in Banco Products (India) Limited vs. CCE, Vadodara, the Tribunal found that Plastic Crates used for material handling within a factory are eligible for credit under the Cenvat Credit Rules. The Tribunal emphasized the importance of proper storage and transportation of inputs in the manufacturing process. Drawing parallels between Plastic Crates and Trolleys, the Tribunal concluded that Trolleys used by the appellant are eligible for CENVAT credit. The Tribunal disagreed with the Revenue's reliance on the case of Commissioner of Pondicherry vs. Mohan Brewaries Limited, stating that the facts and equipment involved were different from the present case. Ultimately, the Tribunal allowed the appeal filed by the appellant, ruling in favor of the admissibility of CENVAT credit on Trolleys. This detailed analysis highlights the arguments presented by both parties, the legal precedents cited, and the Tribunal's reasoning in deciding the issue of admissibility of CENVAT credit on Trolleys used in the assembly line of ACs.
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