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TMI Blog2010 (9) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... not covered by the definition of input as appearing in rule 2(k) of Cenvat Credit Rules, 2004, as the same was not being used directly or indirectly in manufacture of their final product, a show-cause notice dated 2-12-2008 was issued, proposing to deny the said credit. After due adjudication, the original adjudicating authority disallowed the credit of Rs. 2,30,841, confirmed the interest on the same and also imposed equivalent penalty under rule 15(2) of Cenvat Credit Rules, 2004 read with section 11AC of the Act. 2. Appeal against the above order did not succeed before Commissioner (Appeals). Hence, the present appeal. 3. I have heard Shri P.P. Jadeja, learned Consultant for the appellant and Shri S.K. Mall, learned SDR f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. CCE 2005 (192) ELT 372 (Trib. - Delhi). The above pleas stand reiterated before me. 5. The controversy involved in the present appeal is as to whether the paint can be considered as eligible input for the purpose of Modvat Credit or not. 6. For better appreciation, the definition of Input, as contained in rule 2(k) of Cenvat Credit Rules, 2004 is being reproduced below : '"Inputs" means- (i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint is an eligible input if used on the final product. However, benefit has been denied on the ground that since the paint has not been used on the final product cleared from the factory, the same will not be entitled to the credit of duty paid on the same. 9. I find that the Tribunal in case of Nagarjuna Agrichem Ltd. (supra), has held that the paint used for painting machinery and pipelines for their upkeep and maintenance, is eligible input for Modvat purpose. Similarly, in the case of Ruchi Health Foods Ltd. (supra), the paint used to protect the plant has been held as admissible modvatable input. In the case of Thirumalai Chemicals (supra), the credit of duty paid on the paint used for protection/safety of the plant was allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary that they must be used on the final product itself. The Commissioner (Appeals) has denied the benefit on paint on the ground that the same is not used for painting the final product, but is used for painting machinery or the floor. The above decisions which were also relied before Commissioner (Appeals), but do not stand discussed by him, lay down that the paint used for protecting machinery to facilitate smooth functioning of the same, can be safely held to be used in the manufacture of final product. The appellants have specifically contended that paint in question is not an ordinary decorative paint but is Epoxy paint used for industrial purpose for making floor dust free for easy movement of goods. As such, it becomes a commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment has referred to oils and lubricants mentioned in the definition required for smooth running of machines, as eligible input as they are used in the manufacture of final product. By applying the same criteria, the paint which are required for smooth running of machinery, by repeatedly painting them and the floor required for smooth movement of raw materials, semi-finished goods and final product by making floor dust-free, has nexus with the manufacture of final product.
14. In view of the above definition of input during the relevant period, I find that the appellants are entitled for the benefit of Modvat Credit in respect of paint in question. The impugned order is set aside and appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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