2015 (10) TMI 1183 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - Held that - Since capital goods was used in the manufacture of final product for which excise duty is paid in my view credit is admissible from the date of installation and use of capital goods. Incorporation of the said premises is merely procedure requirement. The main requirement of availing Cenvat Credit is that capital goods should be used in the manufacture of dutiable good which is not under dispute. In view of this position I am of the view that appellant was entitled for the Cenvat Credit from the date of receipt and installation of the capital goods even though the part of the factory of the appellant was incorporated subsequently. - Decided in favour of assessee.

Summary

Issues:
- Availment of Cenvat Credit for capital goods not incorporated into registered premises
- Demand of interest and penalty for Cenvat Credit availed
- Interpretation of requirement for availing Cenvat Credit

Analysis:
1. The appellant availed Cenvat Credit for capital goods installed in premises not part of the registered premises. The Commissioner (Appeals) upheld the order-in-original demanding interest and penalty, leading to the appeal.

2. The appellant failed to appear during the hearing, prompting the tribunal to proceed with the case based on merit. The Asstt. Commissioner argued that credit for capital goods is permissible only when received in the registered factory, citing a precedent.

3. The tribunal considered the arguments and records. It noted that although the capital goods were initially installed in adjacent premises, they were used in manufacturing dutiable goods in the registered premises, making the credit admissible from the installation date. The tribunal emphasized that the key requirement for Cenvat Credit is the use of capital goods in dutiable goods' manufacture, which was not disputed in this case.

4. The tribunal distinguished a cited precedent where capital goods were moved to another unit for job work, unlike the present case where the goods were used for manufacturing in the registered premises. Consequently, the tribunal modified the impugned order, allowing the appellant's appeal.

This detailed analysis of the judgment highlights the issues, arguments, and the tribunal's reasoning in deciding the appeal related to the availment of Cenvat Credit for capital goods not initially incorporated into the registered premises.