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2006 (1) TMI 275 - AT - Central ExciseCenvat/Modvat - Capital goods - input services - capital goods installed in the Research & Development wing - Confiscation - penalty - Whether the items were 'Capital goods' or not within the meaning of Rule 57Q? - HELD THAT:- As, it is seen that for earning the credit in terms of the said Rule, the only requirements for such specified capital goods should be used in the factory of the manufacturer of the final products. Undisputedly, Research Laboratory is situated in the licensed factory premises of the appellants, and are being used for the manufacture of the excisable goods. As such, going by the definition of the capital goods, the disputed items in question earn the credit irrespective of their not being actually used in the production of the final products. Following the Hon’ble Supreme Court [2001 (7) TMI 118 - SUPREME COURT]. Though the period before the Supreme Court was different when the definition of capital goods meant differently. However, the said definition underwent a change as already observed by us and the earlier requirement of the various capital goods being used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products was done away with and the only requirement was that the specified goods in the table annexed with Rule 57Q should be used in the factory of the manufacture of the final products. Admittedly, Research Laboratory being situated within the factory premises, disputed capital goods were used in the factory for manufacture of final products and thus would get covered by the definition of capital goods under Rule 57(2) as they existed at the relevant time and would earn the credit. Thus, we set aside the impugned demand against M/s. USV Ltd., as also the penalties imposed upon them as also on the other appellants. Confiscation of the goods is also set aside. In a nutshell all the appeals are allowed with consequential relief to the appellants.
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