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2016 (4) TMI 18 - AT - Central ExciseDenial of CENVAT credit with respect to motor vehicle chassis (Tractor) falling under Chapter 87 of the Central Excise Tariff Act, 1985 - interest and an equivalent amount of penalty has been imposed under Rule 13 (1) of CENVAT Credit Rules, 2002 - Held that:- From the above definition of capital goods, goods of Chapter 87 are not covered within the definition of capital goods for the purpose of taking CENVAT Credit as capital goods. There is also nothing on record to suggest as to how the said goods are directly used in or in relation to the manufacture of metals, the end product of the appellant. It is observed from Order passed by the first appellate authority relied upon Supreme Court's judgment in the case of J.K. Cotton Mills Vs. C.C.ST (1964 (10) TMI 2 - SUPREME COURT OF INDIA ), where it is held that use of goods in relation to manufacture has to be clearly established. It is categorically held by the first appellate authority that motor vehicle chassis on which CENVAT Credit is taken has not been used directly in or in relation to the manufacture of the finished goods manufactured by the appellant. Accordingly, the Bench does not find any merit in interfering with denial of CENVAT Credit and interest ordered by the first appellate authority against the appellant. In the case of Gajra Gears Ltd. Vs. CCE (2015 (5) TMI 629 - SUPREME COURT ), Hon'ble Apex Court also made the observations that material handling equipments like hand trolley or fork lift and operational machines are classifiable under Chapter 73 of the Central Excise Tariff and not eligible for CENVAT Credit. In view of the above observations and the settled proposition of law, appeal filed by the appellant with respect to admissibility of CENVAT Credit is rejected. So far as imposition of penalty upon the appellant is concerned, it is observed that the appellant is a Government of India undertaking and cannot be said to have any malafide intention to take CENVAT Credit by fraud, willful misstatement etc. Accordingly, penalty imposed upon the appellant is set aside.
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