2010 (5) TMI 750 - AT - Central Excise

Summary

Issues:
1. Eligibility of Parallel Flange Beams for Cenvat credit as capital goods or inputs.

Detailed Analysis:
The case involves the Department appealing against the Commissioner (Appeals) decision regarding the eligibility of Parallel Flange Beams for Cenvat credit. The respondent, a chemical manufacturer, availed Cenvat credit on these beams, which the Department disputed. The Department argued that the beams were used as part of the foundation and not eligible for credit. The Assistant Commissioner upheld the Department's view, leading to the respondent filing an appeal with the Commissioner (Appeals).

The Commissioner (Appeals) allowed the appeal, stating that the beams were crucial for the functioning of new machines in manufacturing excisable goods without vibration. This led to the Department filing the present appeal against the Commissioner (Appeals) decision. During the hearing, the respondent did not appear, and the Department reiterated its stance that the beams were ineligible for Cenvat credit based on a recent decision by the Larger Bench in the case of Vandana Global Ltd. The Tribunal analyzed the submissions and records, focusing on whether the beams qualified as capital goods or inputs for Cenvat credit.

The Tribunal concluded that the Parallel Flange Beams did not meet the criteria for capital goods or inputs under the Central Excise Tariff definition. They were used as part of the foundation to prevent machinery vibration, which did not align with the definition of capital goods. Referring to the Larger Bench decision in the Vandana Global Ltd. case, the Tribunal held that the beams were not eligible for Cenvat credit. Consequently, the Tribunal set aside the Commissioner (Appeals) order, reinstating the Assistant Commissioner's order. Additionally, the respondent's cross-objection was dismissed.

In summary, the Tribunal's decision clarified the ineligibility of Parallel Flange Beams for Cenvat credit as capital goods or inputs, based on their usage and the established legal position, as highlighted in the Vandana Global Ltd. case.