2006 (2) TMI 538 - AT - Central Excise

Summary

Issues:
1. Eligibility of capital goods used in the manufacture of color TV chassis for Cenvat credit under Rule 6(4) of Cenvat Credit Rules, 2001.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved three appeals challenging the order of the Commissioner, Noida dated 28-12-2004. The case revolved around M/s. Samsung Electronics (I) Information and Telecommunication Ltd., Noida, engaged in the manufacture of color monitors and chassis of color televisions, and M/s. Samsung India Electronics Ltd., undertaking the manufacture of color televisions in their respective factories in Noida. The central issue was whether the capital goods used by SEIITL in the manufacture of color TV chassis, done on job work basis for SEIITL and cleared without payment of duty, would be eligible for Cenvat credit under Rule 6(4) of the Cenvat Credit Rules, 2001.

The appellant's counsel relied on several case laws to support their argument, emphasizing that job workers are entitled to credit of duty paid on inputs used in manufacturing on job work basis. They cited precedents such as Xpro India Limited v. CCE, Delhi-II, Sterline Industries (I) Ltd. v. C.C.E., Pune, Vulcan Electro Controls Pvt. Ltd. v. CCE, Jaipur-I, and others to bolster their position. These cases highlighted that credit on inputs used in manufacturing goods on job work basis is admissible, and clearance of goods on job work does not amount to clearance under full exemption or at a nil rate of duty.

In contrast, the Senior Departmental Representative reiterated the stance taken by the lower authorities. However, after examining the case records and considering the consistent decisions of the Tribunal regarding the eligibility of inputs and capital goods for Cenvat credit, the Tribunal concluded that both inputs and capital goods have been found to be eligible for availment of Cenvat credit. Therefore, the impugned order was set aside as not maintainable, and the appeals were allowed in favor of the appellant.

This detailed analysis of the judgment showcases the legal arguments presented, the reliance on relevant case laws, and the ultimate decision of the Appellate Tribunal CESTAT, New Delhi in allowing the appeals based on the eligibility of capital goods for Cenvat credit under Rule 6(4) of the Cenvat Credit Rules, 2001.