2009 (2) TMI 848 - AT - Central Excise

Summary

Issues involved: Whether CENVAT credit on capital goods used to set up a captive power plant in a sugar factory, which generates electricity for the manufacture of dutiable final product, is admissible.

Summary:
The issue in this case pertains to the denial of CENVAT credit by the Commissioner on the grounds that the captive power plant is immovable property and not excisable. The appellants argue that despite the plant being immovable, it generates electricity used in the production of dutiable final products. The Tribunal, relying on previous decisions, including Tata Engineering and Locomotive Co. Ltd. vs Commissioner of Central Excise, Pune-I, held that credit is admissible for capital goods used in the manufacture of dutiable products. The Tribunal set aside the disallowance of credit and penalty, allowing the appeal based on the precedent set by previous decisions.

In conclusion, the Tribunal ruled in favor of the appellants, allowing the CENVAT credit on capital goods used in setting up the captive power plant for the manufacture of dutiable final products.