2014 (12) TMI 407 - AT - Central Excise

Waiver of pre-deposit of CENVAT credit, interest thereof and penalty - credit on the tyres for dumpers used for transportation of lime stone from the mines to the factory of the appellant - Held that - Following decision of M/s HINDUSTAN ZINC LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2013 (1) TMI 29 - CESTAT NEW DELHI - Prima facie case in favour of assessee - Stay granted.

Summary

Issues:
1. Denial of CENVAT credit on tyres for dumpers under Chapter 4011.99.
2. Interpretation of the definition of 'capital goods' and 'inputs' under Rule 2(a) of the CENVAT Credit Rules, 2004.
3. Application of Tribunal decision in Hindustan Zinc Ltd. case to the present scenario.
4. Seeking waiver of pre-deposit of CENVAT credit, interest, and penalty.

Analysis:

1. The Commissioner (Appeals) denied CENVAT credit on tyres for dumpers used in transportation, stating they did not fall under the definition of Capital goods in Rule 2(a) of the CENVAT Credit Rules, 2004.

2. The appellant argued that tyres can qualify as 'capital goods' or 'inputs' under Rule 2(a), as they are parts of dumpers used in manufacturing processes. The Tribunal held that while dumpers and tyres are not capital goods, tyres can be considered 'inputs' under the broader definition in Rule 2(k).

3. The Tribunal found the process of transporting raw materials integral to manufacturing, allowing CENVAT credit on items like refractory lining. Relying on the Hindustan Zinc Ltd. case, the Tribunal concluded that tyres for dumpers used in the manufacturing process qualify as 'inputs' eligible for credit.

4. Considering the strong case made by the appellant, the Tribunal granted a complete waiver of pre-deposit of dues, including CENVAT credit, interest, and penalty, until the appeal's final disposal.