2015 (6) TMI 1069 - AT - Central Excise

Refund claim - availed Cenvat credit of Central Excise duty paid on lubricants used in the dumpers, treating the same as inputs - immediately reversed the Cenvat credit on objected by the Internal Audit Wing of Central Excise Department - Held that - the scope of input is very wide and the definition clearly provides all goods used in the factory of the manufacturer/producer shall be considered as input for the purpose of taking Cenvat credit. I find that lubricant is not itemized in the excluded category of goods, for which the definition of input has created the embargo for not extending the Cenvat benefit. Therefore, I am of the considered view that Central Excise duty paid by the appellant on the input i.e. lubricant will be eligible for Cenvat credit. - Decided in favour of appellant

Summary

Issues:
1. Availment of Cenvat credit on lubricants used in dumpers.
2. Rejection of refund application for Central Excise Duty reversed on lubricants.
3. Interpretation of the definition of 'input' under Cenvat Credit Rules.

Analysis:
The appellant, a coal producer registered with the Central Excise Department, availed Cenvat credit on Central Excise duty paid on lubricants used in dumpers during March 2011 to March 2012. The Internal Audit Wing objected to this credit, leading the appellant to reverse it. Subsequently, the appellant filed a refund application, contending that the reversal was improper as lubricants should be considered inputs eligible for Cenvat credit. The refund application was rejected, prompting the appeal before the Tribunal.

The Tribunal considered the definition of 'input' under the Cenvat Credit Rules, which includes all goods used in the factory by the manufacturer for the purpose of taking Cenvat credit, except excluded goods. The appellant argued that since lubricants were not excluded from the definition of input, denying Cenvat credit on them was unjustified. The Tribunal agreed with the appellant, emphasizing the broad scope of the input definition and the absence of lubricants in the excluded category, concluding that the Central Excise duty on lubricants should be eligible for Cenvat credit.

The Department's position was that dumpers used by manufacturers of excisable goods were not specifically classified as capital goods, making lubricants used in them ineligible for Cenvat credit. However, the Tribunal found merit in the appellant's argument that dumpers were used within the mining area for coal production, falling under the expansive definition of 'input' in the Cenvat Credit Rules. As lubricants were not listed as excluded goods, the Tribunal held that the Central Excise duty paid on lubricants should indeed be eligible for Cenvat credit.

In light of the above analysis, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant and directing any consequential relief as per the law.