2009 (6) TMI 591

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..... mounting to Rs. 2,41,488/- has been denied in respect of welding electrodes, D.P. Liner, and processing chemicals namely Ranocide, Drimex and Magna flock etc. on the ground that the same are not inputs used in the manufacture of finished goods - sugar. Similarly the capital goods credit amounting to Rs. 1,44,800/- has been denied in respect of steel wire rod used as part of the cane unloader, chain and spares of cane carrier and spares of the boiler on the ground that the same are not covered by the definition of capital goods. 2. Heard both the sides. 2.1. Shri K.K. Gupta, Advocate, the learned Counsel for the appellant pleaded that welding electrodes are used for repair and maintenance of sugar mill machinery and in terms of .....

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..... der Chapter 68 and are used for insulation of boiler, and the same being parts of Boiler falling under Chapter 84, are duly covered by the definition of capital goods, that all these above items, though not falling under Chapter 84, are parts and spares of the goods falling under Chapter 84 and hence the same have to be treated as capital goods and that as per supplementary instructions of the Board (para 2.1.1 of Chapter 5 relating to Cenvat credit, the definition of 'capital goods' includes components, spares, accessories of capital goods and components, spares and accessories falling under any chapter are covered by the definition of capital goods and that in view of this, the ground on which the capital goods Cenvat credit, has been den .....

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..... acie, there is merit in the contention of the appellant for eligibility of Cenvat credit. As regards, the eligibility of the disputed item of capital goods namely steel wire rope, chain and spares of cane carrier and spare of Boiler for Cenvat credit, from the use of these items as described above, it is clear that all of them are parts of capital goods. While the steel wire rope is part of cane unloader and other spares are part of the cane carrier and insulating materials are part of boiler. Thus in respect of these items of capital goods also, prima facie, there is merit in the contention of the appellant for their eligibility for Cenvat credit. In view of the above, I am of the view that there is prima facie strong case in favour of the .....

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