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2021 (8) TMI 1199 - AT - Central ExciseCENVAT Credit - capital goods - input services - capital goods installed in the Research & Development wing - scope of remand proceedings - Section 2(e) of the Central excise Act, 1944 - extended period of limitation - HELD THAT:- In the registered premises, appellant should undertake the activities relating to manufacture of the finished goods, it is not necessary that each and every part of the premises should be dedicated to manufacturing of the finished goods, there can be number of parts which undertake the activities such as storage of the raw material and finished goods, administrative activities, development of the product manufactured etc. all such activities are integral to manufacture of the finished products. Admittedly the Research and Development building is not the office of the appellant factory. The only question which needs to be examined whether these Capital Goods are used in the factory of manufacturer. The phrase used in the definition of Capital Goods, is not the same as that in the definition of “inputs” where it is stated that to qualify as inputs the goods should have been used in or in relation to the manufacture of finished goods. In case of the Capital Goods, the use of Capital Good within the factory of manufacturer whether in or in relation to manufacture of the finished products or otherwise shall make them eligible as Capital Goods in terms of the definition. The observations made by the Commissioner that these capital goods should have been used by the manufacturer in his “factory” whether directly or indirectly, in or in relation to the manufacture of final products do not find support from the definition of Capital Goods. Since the Capital Goods after the demolition of manufacturing sheds, were shifted within the registered premises from the from the manufacturing shed to the Research and Development Building, the same cannot be said to have been removed from the factory. Undisputedly the CENVAT Credit taken against these Capital Goods when they were received was not disputed by the revenue - In the decision of DELHI CLOTH & GENERAL MILLS CO. LTD. VERSUS JOINT SECRETARY, GOVERNMENT OF INDIA [1978 (2) TMI 205 - DELHI HIGH COURT], taking of the goods from one place in the registered premises/ factory to the other place in the same registered premises/ factory do not amount to removal or clearance of the goods. As it is held, the Research and Development Building to be the part of the factory/ registered premises of the Appellant, CENVAT Credit on the input services for use in the said Research and Development building/ activities could not have been denied - It is settled law that CENVAT Credit on the inputs or the input services received by the appellant cannot be denied to the appellant till the time the same are used in the factory of the manufacturer. Extended period of limitation - HELD THAT:- All the activities were well within the knowledge of the department as is seen from the various correspondences highlighted by the tribunal in the order remanding the matter back to the original authority. In view of the specific correspondences and declarations referred earlier, there are no justification in invoking the extended period of limitation for making these demands. Appeal allowed - decided in favor of appellant.
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