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2023 (10) TMI 1082 - AT - Central ExciseCENVAT Credit - inputs - purchase of tubes and flaps from other manufacturers and clearing the same along with the tyres to the original equipment manufacturers and overseas purchasers - Penalty of company and directors. It is the contention of the Department that the said tubes and flaps are not used in the manufacture of the tyres and as such do not qualify to be “inputs” in view of the definition given under Rule 2(k) of CCR, 2004. HELD THAT:- It is seen that the definition of Inputs as above has a wider connotation and the inputs can be used directly or indirectly and may or may not be contained in the final product. Moreover, they can also be accessories of the final products cleared along with the final products. It is not the case of the Department that these inputs fall under any exclusion clause of the definition. The Courts and Tribunals have been consistently holding that the definition of Inputs is wide and comprehensive. There are number of decisions in favour of the appellants in cases with identical facts. Only one decision of Hon’ble Kerala High Court is against the appellants and the same is relied upon in the impugned order. Learned Counsel for the appellants submits that Hon’ble Apex Court [2011 (11) TMI 881 - SC ORDER] has stayed the operation of the said decision, of the Hon’ble Kerala High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS APPOLLO TYRES LTD. [2010 (8) TMI 287 - KERALA HIGH COURT]. Even after the decision of Hon’ble Kerala High Court in the above case, Tribunal has been consistently holding that the credit of tubes and flaps is admissible for the manufacturers of tyres. The appellants are eligible to avail CENVAT credit on flaps and tubes cleared in a set packing along with the tyres manufactured by them. It is further found that Department’s objection that the assessable value of tubes and flaps is separately shown in the invoices and therefore, CENVAT credit is not available, is not acceptable. Penalty of company and directors - HELD THAT:- As the credit is admissible on merits, penalty imposed on the company and the Directors is not sustainable. The impugned order is set aside - Appeal allowed.
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