2015 (10) TMI 983 - AT - Central Excise

Denial of CENVAT Credit - denial on the sole ground that the said trucks are motor vehicle on which cenvat credit is available only to the specified service provider and not to the manufacturer of the excisable goods - Held that - On perusal of the definition of input contained in Rule 2 (k) of the Rules, it reveals that the manufacturer is permitted to take cenvat credit on all goods used in the factory for manufacture of the final product. The goods on which cenvat credit is not permissible has been clearly spelt out in the exclusion clause of the definition of input . The JO trucks are not considered as motor vehicle as per the Section 2 (28) of the Motor Vehicles Act, 1988, since the same are used only in a factory or in any other enclosed premises. With regard to concrete sleepers used for laying railway lines within the factory premises, I am of the considered opinion that the said item is not falling under the exclusion clause of the definition of input and as such by nature of its use and its participation in the manufacture/ production of the excisable goods, the same should be considered as input for the purpose of taking cenvat credit. - process of handling/lifting/pumping/transportation of raw materials also a process in or in relation to manufacture, if integrally connected with further operations leading to manufacture of goods. - No substance in the impugned order, and as such, the same is set aside - Decided in favour of assessee.

Issues:
1. Denial of cenvat credit on JO Trucks and concrete sleepers by the Commissioner of Central Excise, Customs, and Service Tax, Raipur.
2. Classification of JO trucks as motor vehicles and exclusion of cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004.
3. Consideration of concrete sleepers as inputs for the purpose of cenvat credit.
4. Interpretation of the definition of 'input' under Rule 2(k) of the cenvat credit rules, 2004.
5. Applicability of the decision in India Cements Ltd. vs. Commissioner of Central Excise, Salem on the present case.

Analysis:

1. The appeal challenged the order denying cenvat credit on JO Trucks and concrete sleepers by the Commissioner of Central Excise, Customs, and Service Tax, Raipur. The appellant argued that both items were essential for the manufacturing process within the factory premises, emphasizing the specific uses of JO trucks for material handling and concrete sleepers for laying railway lines.

2. The appellant contended that JO trucks should not be classified as motor vehicles under the Motor Vehicle Act, 1988, as they were used solely within the factory premises for transporting goods between plant facilities. The Tribunal agreed that JO trucks did not fall under the definition of 'motor vehicle' as per the Act, making the exclusion clause for vehicles in the definition of 'input' inapplicable. Therefore, the appellant was eligible for cenvat credit on JO Trucks.

3. Regarding concrete sleepers, the appellant argued that they played a crucial role in the manufacturing process by laying railway lines within the factory premises. The Tribunal considered concrete sleepers as integral to the production process and not falling under the exclusion clause of the definition of 'input,' thus qualifying them for cenvat credit.

4. The Tribunal analyzed the definition of 'input' under Rule 2(k) of the cenvat credit rules, 2004, which allows manufacturers to claim credit on goods used in the factory for manufacturing final products. Exclusions such as motor vehicles are clearly specified, and in this case, the Tribunal found JO trucks and concrete sleepers met the criteria for being considered as inputs.

5. The decision in India Cements Ltd. vs. Commissioner of Central Excise, Salem, cited by the respondent, was deemed inapplicable to the present case. The Tribunal distinguished the case as it did not address whether concrete sleepers should be classified as inputs. Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant with any consequential relief as per the law.

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