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2015 (9) TMI 1020 - Commissioner - Central ExciseWrongful availment of CENVAT Credit - availing credit while availing exemption - whether the goods namely lubricating oils, grease, articles of plastics (bobbins and plastic crates) etc. fall within the definition of capital goods or not - Held that:- As regards credit on lubricating oils and grease is concerned the appellants have contested that they are covered by the definition of capital goods, as held by the decision in the case of Vipras Castings Ltd. v. CCE - [2005 (1) TMI 470 - CESTAT, MUMBAI]. I have gone through the said judgment and I find that the same was passed in reference to the erstwhile Central Excise Rules, 1944 to allow Cenvat credit consequent to the amendment in Rule 57 to include lubricating oil/grease under the definition of Capital goods - Once, the goods in question were specifically covered under the definition of inputs it was not open to the appellants to seek credit of the same under capital goods. The obvious reason for their doing so was that the appellants were working under Notification No. 30/2004-C.E., dated 9-7-2004 and clearing their finished goods without payment of duties of excise, and therefore, they were not entitled to take credit of the duty paid on inputs, in terms of the notification ibid. I also observe that there is no claim of the appellants that they were eligible for the credit on the said goods as inputs. Hence, I hold that Cenvat credit on lubricating oil/grease was not admissible to the appellants and the same has been rightly denied by the adjudicating authority. As per definition of capital goods as provided under Rule 2(a)(A)(1) of the Credit Rules, credit is admissible on capital goods specified therein, which are used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office. The only exclusion for eligibility of credit as provided under Rule 6(4) of the Credit Rules is that the capital goods should not have been used exclusively in the manufacture of exempted goods or in providing exempted services, other than the finals products which are exempt from the whole of duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year. - appellants are eligible to Cenvat credit on plastic crates, bobbins under capital goods. Appellants plea that no mens rea to avail inadmissible credit was present in their case, is devoid of merits and accordingly, penalty imposed under Rule 15(3) of the Credit Rules read with Section 11AC of the Act, is upheld. However, the penalty would be restricted to the amount of demand arrived at after re-quantification of the demand by the jurisdictional Deputy/Assistant Commissioner. - Decided partly in favour of assessee.
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