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2016 (9) TMI 627 - CESTAT CHANDIGARH

2016 (9) TMI 627 - CESTAT CHANDIGARH - 2016 (344) E.L.T. 1125 (Tri. - Chan.) - Cenvat credit - recovery as wrongly availed in respect of capital goods used exclusively for R&D purposes - machines/ equipments/ apparatus installed in engineering Research Design and Development laboratory was located in the buildings separately from the production area - Held that:- the assessee’s R&D facility is located within the factory premises registered with the Central Excise Department, housed in buildings .....

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earlier periods. Therefore, the demand for reversal of cenvat credit is not sustainable inasmuch as it is allowable under the definition of capital goods under the Cenvat Credit Rules in view of the various decisions of Hon'ble Supreme Court, High Court and Tribunal. - Decided in favour of appellant - Excise Appeal Nos. 51748 -51749 of 2014 - Final Order No. A/60987-60988/2016-EX[DB] - Dated:- 19-7-2016 - Mr. Ashok Jindal, Member (Judicial) and Mr. V. Padmanabhan, Member (Technical) Sh. B. L. N .....

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order dated 29.02.2016. The present order is being passed complying with the directions of the Hon ble High Court of Punjab and Haryana vide their order dated 29.02.2016. In the above order the Hon ble High Court ordered this Tribunal to decide the matter afresh and to pass a reasoned speaking order after affording an opportunity of hearing to the parties in accordance with law. The direction of the Hon ble High Court is an under: 7. A show cause notice dated 20-3-2013 (Annexure A-1) was i .....

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l of the respondent had dealt with the issue in Para 3 of the order. A perusal thereof shows that it does not satisfy the test of a reasoned and speaking order. Para 3 is quoted below :- The definition of capital goods as given in Rule 2(a) of the Cenvat Credit Rules, 2004 covers the goods listed in this sub-rule, which have been used in the factory of manufacture of final product. Thus, for capital goods Cenvat credit, their use in or in relation to manufacture of final product is not required .....

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orded by the Tribunal for allowing the appeal of the assessee. 9. In view of the above, since the order dated 15-1-2015 (Annexure A-3) does not qualify being a reasoned speaking order as enunciated by the Apex Court in M/s. Kranti Associates Pvt. Ltd. s case (supra), accordingly, the appeal is allowed and the order dated 15-1-2015 (Annexure A-3) passed by the Tribunal is set aside. The matter is remitted to the Tribunal to decide the same afresh and for passing a well reasoned speaking orde .....

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pital goods used in the manufacture of motor vehicles. The appellant s factory was visited by the officers of internal audit from the Department in November, 2012 during which it was noticed that the appellant had availed cenvat credit in respect of capital goods used exclusively for R&D purposes. The internal audit team found that the cenvat credit was taken duty paid on machines/ equipments/ apparatus installed in engineering Research Design and Development laboratory which was located in .....

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due process of law passed the impugned order dated 17.12.2013 in which he confirmed the demand alongwith interest and also imposed penalty of equal amount. Being aggrieved, the assessee filed an appeal before the Tribunal who decided the matter vide order dated 15.01.2015 in which the impugned order was set-aside. The Revenue challenged this order before the Hon ble High Court who remitted the matter to this Tribunal to decide the same afresh and to pass a reasoned, speaking order. 4. In the app .....

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the cenvat credit cannot be denied. They placed reliance on several case laws including the case of USV Limited vs. CCE, Mumbai - 2006 (195) ELT 158 (Tri. Mum.). 5. Ld. DR on the other hand supported the impugned order of the Commissioner with the argument that the capital goods in question were not used for the manufacture of final product but were solely used for the purpose of R&D. he further argued that since the R&D activities, where the capital goods were installed, were in buildi .....

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004 is given below: (a) capital goods means: (A) the following goods, namely:- (i) all goods falling under chapter 83, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act; (ii) pollution control equipment; (iii) components, spars and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) t .....

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as capital goods is that these goods should be used in the factory of the manufacturer of the final product. There is an exclusion however to any equipment or appliance used in office. 8. In is on record that the assessee s R&D facility is located within the factory premises registered with the Central Excise Department, housed in buildings which are different from the factory sheds. When considered with reference to the definition of capital goods given above, we are of the view that there .....

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