2008 (12) TMI 546 - AT - Central Excise

Cenvat/Modvat credit - Capital goods - tippers - Held that - the tippers are squarely covered by the definition of capital goods - reliance was placed on the decision of this Bench in the case of India Cements Ltd. v. Commissioner of CE, Hyderabad-III 2004 (11) TMI 155 - CESTAT, BANGALORE wherein credit was allowed in the case of bulldozer - appeal allowed.

Summary

Issues:
Entitlement of tippers for Cenvat credit as capital goods.

Analysis:
The appeal was filed against the Order-in-Appeal No. 261/2006-C.E., which denied Cenvat credit to tippers falling under Chapter 87 as they were not considered capital goods under Rule 2 of Cenvat Credit Rules, 2002. The Revenue argued that Chapter 87 goods were excluded from the definition of capital goods. The learned Advocate contended that tippers should be eligible for credit under Rule 2(b) as they are accessories to conveyor systems falling under Chapter 85. Referring to Rule 2(b)(i) and (iii), it was argued that tippers are covered as accessories of goods specified under Chapter 85, making them eligible for Cenvat credit. The Advocate also cited a Board's circular and a precedent where credit was allowed for a similar case involving a bulldozer. The Tribunal found the impugned order incorrect, citing the clear inclusion of tippers as capital goods and setting aside the order in favor of the appellant.

In conclusion, the Tribunal allowed the appeal, emphasizing that tippers should be considered capital goods eligible for Cenvat credit. The decision was based on the interpretation of Rule 2(b) and previous precedents supporting the inclusion of accessories like tippers under the definition of capital goods. The Tribunal found the impugned order to be legally incorrect and provided consequential relief to the appellant.