2007 (1) TMI 480 - AT - Central Excise

Summary

Issues involved: Interpretation of the definition of capital goods u/s relevant provisions for CENVAT Credit eligibility for gas cylinders used in the manufacturing process.

Summary:

Issue 1: Interpretation of the definition of capital goods
The appellants appealed against the denial of CENVAT Credit for gas cylinders used in storing gases for manufacturing final products, contending that storage tanks are eligible for credit as capital goods. The Revenue argued that cylinders have no role in the manufacturing process. The definition of capital goods during the relevant period included storage tanks used in the factory for manufacturing final products. Since cylinders were used for storing gases for production in the factory, they were deemed eligible for Modvat Credit as capital goods. The Tribunal found that the cylinders met the criteria for capital goods as per the definition and allowed the appeal, setting aside the impugned order.

Conclusion:
The Tribunal ruled in favor of the appellant, holding that gas cylinders used for storing gases in the manufacturing process are eligible for CENVAT Credit as capital goods based on the relevant provisions and definition in the Tariff Act.