2015 (12) TMI 1655 - AT - Central Excise

CENVAT credit - denial on the ground that the disputed goods are not confirming to either inputs or capital goods for the purpose of taking cenvat credit - Held that - impugned order has been passed based on documents submitted by the respondent. Since upon analysis of the factual aspect the learned Commissioner (Appeals) has held that cenvat credit is available on the disputed goods I do not find any reason to deny the cenvat credit on the ground that the same have not been used in or in relation to the manufacture of final product by the respondent - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against the extension of cenvat credit benefit by Commissioner (Appeals) to the respondent.
- Disputed goods classification as inputs or capital goods for cenvat credit eligibility.

Analysis:
1. Issue 1 - Appeal against cenvat credit extension:
The Revenue appealed against the order where the Commissioner (Appeals) granted cenvat credit benefit to the respondent. The appellant argued that the disputed goods did not qualify as inputs or capital goods for cenvat credit purposes. On the contrary, the respondent contended that the Commissioner (Appeals) correctly classified the goods as capital goods and inputs, allowing cenvat credit. The respondent supported their stance by citing specific judicial decisions.

2. Issue 2 - Classification of disputed goods for cenvat credit eligibility:
The Commissioner (Appeals) analyzed the matter and found merit in the respondent's submission. The Commissioner noted that the appellant disputed a portion of the total demand, claiming credit for specific items like electric motors, pumps, machine parts, etc., which fell under the definition of capital goods as per the Cenvat Credit Rules, 2004. The Commissioner observed that the disputed goods were essential for the manufacturing activities of the appellant and were integral to the manufacturing process. The Commissioner set aside the demand related to these items, emphasizing that denial of credit on such capital goods was unjustified.

3. The Commissioner further addressed the credit taken on structural items like MS channel, MS joist, plates, etc. The Commissioner acknowledged that these items were crucial for the completion of technological structures of capital goods and were essential for the manufacturing activities of the appellant. These structural items were deemed necessary for the smooth operation and efficiency of machinery, thus qualifying as inputs or capital goods for cenvat credit purposes. The Commissioner emphasized that these items were integral to the manufacturing process and essential supplements to plant and machinery.

4. Final Decision:
After considering the arguments and documents submitted by the respondent, the Tribunal upheld the decision of the Commissioner (Appeals). The Tribunal agreed with the classification of the disputed goods as capital goods/inputs for cenvat credit eligibility. The Tribunal found no reason to deny cenvat credit based on the usage of the goods in relation to the manufacturing of the final product. Citing relevant judicial precedents, the Tribunal dismissed the Revenue's appeal, affirming the availability of cenvat credit on the disputed goods.