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2016 (12) TMI 526 - AT - Central ExciseCENVAT credit - denial of credit on the ground that items are not covered under the definition of Capital Goods / inputs as provided under CENVAT Credit Rules, 2004 - Held that: - The Aqueous Film Forming Foam(AFFF) is used in Diesel Hydro Treator (DHT) and Hydrogen Generation Unit, Fire Fighting system. The credit is denied on AFFF, stating that pre-commissioning and commissioning of DHT is not integrally connected with manufacture. The equipments in DHT project, is set up by appellant to manufacture Euro III/IV HSD and is part of manufacturing process. Hence any item used in pre-commissioning or commissioning activity for the subject project is very much part of the manufacturing process. The Diesel Hydro Treator plant /project is intended for meeting the new BIS specifications and is a part of manufacturing activity. Therefore, the denial of credit is unjustified. The credit on umbrella structure is denied for the reason that it is a composite structure. This is not sufficient ground for denial of credit. It is not disputed that Umbrella structure is part of the high mast lighting where high inflammable products are manufactured. Therefore the denial of credit is unjustified. The credit availed on Aluminium coil used for insulation of pipes is held to be admissible in various judgments viz; CCE, Trichy Vs National Oxygen Ltd. [2006 (7) TMI 84 - CESTAT, CHENNAI] as without such insulation, heat in pipes and tanks cannot be controlled. The credit availed on caustic soda lye is denied on the ground that it does not fall within the definition of capital goods. The appellants have raised the contention that credit is eligible under the category of inputs. In the case of Tamil Nadu Petro Products V CCE, Chennai [2001 (3) TMI 226 - CEGAT, CHENNAI] the credit on this item was held to be admissible. Again, credit availed on paint thinner, Hydrazine hydrate, chemicals used for cleaning, liquid nitrogen, and transformer oil etc, has been held to be admissible in the judgments relied by the appellant. However, I cannot agree with the credit availed on Aviation fuel. It is submitted by appellant that this item is used to conduct quality test based on which certificate is renewed periodically. As rightly pointed out by the Ld AR, the definition of inputs expressly excludes Light diesel oil, HSD and motor spirit. In that case the credit on Aviation turbine fuel cannot be allowed. Appeal disposed off - decided partly in favor of appellant-assessee.
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