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2006 (1) TMI 312 - AT - Central ExciseCenvat/Modvat - Capital goods and inputs used for Capital goods - interest - Penalty - HELD THAT:- The items like angles, channels, beams, pipes, MS tubes, plane plates, flats, cable trays, SS sheets are used as parts of a Technological structures which support a reaction vessel or used in particular Equipment in the manufacture of Bulk Drugs. From the photographs shown by the learned Advocate during the hearing, we are convinced that the above items are used as parts of Technological structures. The learned Commissioner in his order has not taken into consideration the decisions cited by the appellants on the ground that they are not relevant in terms of Rule 2 of the Cenvat Credit Rules, 2002. A careful study of the Modvat/Cenvat provisions right from its inception in 1986 reveals a very gradual trend of liberalized interpretation. In dismissing the case laws cited by the appellants, the Commissioner is trying to put the clock back. The definition of “Capital Goods” as per Rule 2(b) of Cenvat Credit Rules is very broad. The components, spares and accessories of the goods specified at Rule 2(b)(i) & (ii) are also defined as “Capital Goods”. In the present case, the appellant is a manufacturer of drugs who uses various machineries which may fall under any one of the Chapters 82, 84, 85 & 90. All these machineries have to be properly supported and connected. Hence, going by the use to which the impugned goods were put, we are convinced that they are all components, spares and accessories specified at (i) & (ii) above as defined under Rule 2(b) of the Cenvat Credit Rules. Thus, we allow the appeal with consequential relief.
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