2011 (9) TMI 861 - AT - Central Excise

Denial of CENVAT Credit - Claim of steel doors as Pollution Control Board - Held that - Steel doors cannot be considered as an input for medicines, when such doors are used in the store rooms where medicines are stored and have no role in the manufacturing process. I also find that the claim before the Tribunal that steel doors should be considered as a Pollution Control Device is not at all sound. Firstly, the Pollution Control Devices are listed under the inclusive definition of Capital Goods . Schedule M to the Drugs and Cosmetic Rules, 1945, which deals with good manufacturing practices and requirement of premises etc., for pharmaceutical products stipulates that in aseptic areas, doors should be of non-shedding material, wooden doors shall not be used. It also states that doors should be made preferably of aluminium or steel material. The same rule also requires walls to be flat, furniture to be smooth and washable etc. Such stipulations do not make steel doors, a pollution control equipment, which has a different connotation. Hence, I am of the opinion that the appellants have not made out a case for availing credit on steel doors either as inputs or as capital goods - Decided against assessee.

Summary

Issues: Claim of input duty credit on steel doors as Pollution Control Device

Analysis:
The case involved a dispute regarding the appellants' claim for input duty credit on steel doors used in premises where medicines are stored. The appellants argued that steel doors are mandatory under the Drugs and Cosmetics Act, making them a Pollution Control Device and justifying their claim for CENVAT credit. The lower appellate authority rejected this claim, leading to the appeal before the Tribunal.

Advocate's Arguments:
The advocate for the appellants supported the claim for CENVAT credit on duty paid for steel doors, contending that they should be considered a Pollution Control Device.

Respondent's Opposition:
The respondent vehemently opposed the claim, stating that the lower appellate authority correctly rejected the appellants' claim for input duty credit on steel doors. The respondent argued that steel doors do not qualify as a device, let alone a Pollution Control Device.

Judgment:
After considering the arguments, the Tribunal upheld the lower appellate authority's decision. The Tribunal ruled that steel doors cannot be considered as an input for medicines since they are used in store rooms and do not play a role in the manufacturing process. Additionally, the Tribunal rejected the claim that steel doors should be classified as a Pollution Control Device. The judgment highlighted that Pollution Control Devices are categorized under the inclusive definition of "Capital Goods," which steel doors do not fall under. The Tribunal referenced Schedule 'M' to the Drugs and Cosmetic Rules, which mandates the use of non-shedding material for doors in aseptic areas, specifying aluminum or steel as preferred materials. However, the Tribunal clarified that such stipulations do not equate steel doors to pollution control equipment. Ultimately, the Tribunal concluded that the appellants failed to establish a case for availing credit on steel doors as inputs or capital goods. The Tribunal also noted that the lower appellate authority had already granted some relief by waiving the imposed penalty. Therefore, the appeal was dismissed.