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2013 (11) TMI 1389 - AT - Central ExciseEligibility for capital goods credit – Machinery gone in the fabrication of plant - Revenue was of the view that the plant is an immovable structure and not excisable and no duty has been paid on the plant, the credit is not admissible – Held that:- In the manufacturing plants, all the machineries cannot be used as such and directly, the various machineries and equipments have to function in conjunction and in unison with each other and for this purpose, they are assembled into a plant - Merely because all the individual equipment, machinery or components are assembled together, it will be preposterous to suggest that the capital goods credit cannot be allowed on this individual machinery/equipment or appliances - The purpose of allowing capital goods credit is to relieve the burden of cascading effect of taxes. If that purpose is to be achieved in a meaningful way, the law has to be interpreted in a reasonable manner so that the object is achieved. Following COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Versus PEPSI FOODS LTD. [2010 (2) TMI 608 - PUNJAB & HARYANA HIGH COURT] - ownership of goods is not a criterion for denial of credit on capital goods and even if it is leased for a particular period, the assessee is eligible to take CENVAT Credit - merely because M/s Inox Air Products Ltd. has leased out the plant to the appellant, that does not disentitle the appellant from availing CENVAT Credit of the excise duty paid on capital goods - RAJARAMBAPU PATIL SSK LTD. Versus COMMISSIONER OF C. EX., PUNE-II [2006 (10) TMI 310 - CESTAT, MUMBAI] - CENVAT Credit of excise duty paid on parts, components and accessories would be admissible under the Capital Goods Credit scheme even if they are assembled into goods which are immovable or exempted. COMMISSIONER OF C. EX., MYSORE Versus ICL SUGARS LTD. [2011 (4) TMI 1065 - KARNATAKA HIGH COURT ] - immovability has no bearing on eligibility for availment of CENVAT Credit on capital goods - So long as the individual machinery, equipment or appliance or parts and components fall within the definition of capital goods under Rule 2(A) of the Cenvat Credit Rules, 2004 and so long as they are used within the factory of production for the manufacture of excisable goods which are chargeable to duty, the benefit of capital goods credit cannot be denied. The appellants are rightly entitled for capital goods credit on various machinery, equipment, appliances and parts and components thereof used in the setting up of oxygen plant within the factory premises - Thus the order denying the capital goods credit is unsustainable in law – Decided in favour of Assessee.
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