2009 (2) TMI 678 - AT - Central Excise

Summary

Issues:
Entitlement of Respondents to Cenvat credit on certain items.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Customs and Central Excise (Appeals), Visakhapatnam, regarding the entitlement of Respondents to Cenvat credit on specific items. The Commissioner (Appeals) examined the issue and found that while most items were eligible for credit, one item related to the Chilling Plant was not connected with specific manufacturing activity and thus the credit was disallowed for that item. The Revenue contested the decision, arguing that several items were not entitled to Cenvat credit. The Revenue relied on a Tribunal decision and pointed out that the Commissioner's order did not address the imposition of penalty and interest, which were confirmed by the Adjudicating authority.

The Respondents, represented by an Advocate, argued that all the items in question were eligible for Cenvat credit, citing various case laws supporting their position. They contended that the items were used for repair and maintenance of machinery, storage of liquid, as accessories to plant and machinery, and for material handling equipment and its parts. They also highlighted that items used to manufacture capital goods for further production would satisfy the definition of input and be entitled to credit. After considering the arguments and case laws presented by the Respondents, the Tribunal concluded that all the items in question were indeed eligible for Cenvat credit based on their usage and purpose.

In the final judgment, the Tribunal rejected the Revenue's appeal, upholding the entitlement of the Respondents to Cenvat credit on the disputed items. The decision was based on the legal position that the items were utilized for valid purposes such as repair and maintenance, storage, and as accessories to machinery, making them eligible for credit. The Tribunal's ruling was delivered after a thorough examination of the issue and consideration of the arguments and case laws presented by both parties.