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M/s. Modern Insulators Ltd. Versus Commissioner of Central Excise, Jaipur And Vice-Versa

2016 (1) TMI 475 - CESTAT NEW DELHI

Denial of CENVAT Credit - credit on steel items used in fabrication of capital goods - repair and maintenance of the old machines. - Held that:- Assessee is a manufacturer of electrical insulators. To manufacture their final product, assessee is required to manufacture kilns, dryer, chimney, glazing machine etc. Admittedly all these machines are fabricated by the assessee in their factory by using the steel items in question. In assessees’ own case for the earlier period, same items used for sam .....

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, appeal filed by the Revenue stand dismissed.

Regarding imposition of penalty for steel items used in civil construction by the assessee - Held that:- In the show cause notice modus operandi of the assessee is missing. Although the appellant has already reversed the cenvat credit which was taken earlier along with interest on pointing by the Departmental officer at the time of investigation. In these terms, it cannot be said that assessee has taken the cenvat credit with malafide int .....

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case are that the assessee is engaged in the manufacture of electrical insulators for the period January, 2002 to December, 2004. The assessee availed the cenvat credit of ₹ 20,24,193/- on various items namely, plates, sheet angles, channels, joists, beams and bar coil etc. These items were used by the assessee for construction of Klins, dryers, storage tank, chimney, curing, corusal and glazing machines, racks and repair and maintenance of old machines in their factory premises., 2. Reven .....

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envat credit as proposed in the show cause notice. Consequently, duty was demanded along with interest. Penalty on the assessee was also imposed. The said order was appealed by the assessee before the learned Commissioner (Appeals) who allowed the cenvat credit on steel items used in fabrication of capital goods and denied used in civil construction. Consequently, duty was demanded along with interest and penalty equivalent to duty was also confirmed by the Commissioner (Appeals). 3. Revenue is .....

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arth, therefore they do not qualify as goods, consequently, assessee is not entitled to take cenvat credit. Therefore, impugned order qua allowing cenvat credit to the assessee is to be set aside. With regard to the assessees appeal, it is contended that CBEC has clarified itself in 2002 that cenvat credit on the items used in civil construction are not entitled for cenvat credit. Therefore, penalty is rightly imposed on the assessee. 6. On the other hand, learned Counsel for the assessee submi .....

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