2008 (5) TMI 202

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..... strips. The appellants are manufacturers of alumina hybrid, calcined alumina, carbon electrode paste, cathode carbon blocks and vanadium sludge. Revenue proceeded against the appellants on the ground that steel plates and strips on which Cenvat credit had been availed by the appellants cannot be considered as accessories to capital goods. The adjudicating authority disallowed Cenvat credit of Rs. 1,74,883/- and Education Cess of Rs. 2,998/- wrongly availed. Further, apart from demanding interest he imposed penalty of Rs.1,77,881/- under Rule 15(2) of the Cenvat Credit Rules, 2002/2004. The Original Authority has given elaborate reasons for denying the credit. In his order, the Original Authority has relied on the observations of the Apex Co .....

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..... The contention of the Revenue is that in terms of Rule 2 of Cenvat Credit Rules, the capital goods are defined as follows: (i) All goods falling under Chapters 82, 84, 85, 90 and Heading Nos. 6802, 6801.10 of the First Schedule to the Tariff Act. (ii) Pollution control equipment. (iii) Components, spares and accessories of the goods specified in (i) and (ii) above. (iv) Moulds and dies. (v) Refractories and Refractory materials. (vi) Tubes & Pipes and fittings thereof. (vii) Storage tanks. used in the factory of the manufacture of final products but does not include any equipment/appliances used in the office. 6.1 The impugned goods are used for fabrication of tanks. Even though the tanks falls under Chapter 84, according to the .....

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..... ervation of the Assistant Commissioner is wrong. Exemption Notification No. 67/95 is an exemption in respect of the capital goods fabricated using the steel plates and strips. In terms of the Explanation 2, the steel plates and strips should be considered as inputs. Therefore, the fact that the steel tank so manufactured are exempted under Notification No. 67/95 cannot be a reason for denying credit to the items, especially when they satisfy the definition of inputs in terms of Explanation 2. Therefore, there is no merit in the impugned order. I set aside the same and allow the appeal with consequential relief. (Operative portion of this Order was pronounced in the open court on conclusion of hearing)
Case laws, Decisions, Judgements, .....

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