2015 (10) TMI 1314 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - Job works - benefit of Notification No.214/1986-CE - Held that - Respondents had also cleared consignments manufactured by them on payment of duty. The Commissioner (Appeals) observed that during the material period the Respondents also used the capital goods dutiable and exempted goods and therefore the CENVAT Credit cannot be denied. - Tribunal in the Respondent s own case for the earlier period in the case of CCE Ahmedabad Vs M/s Patel Alloys Steel Ltd 2011 (4) TMI 327 - CESTAT AHMEDABAD dismissed the appeal filed by the Revenue. - Decided against Revenue.

Summary

Issues:
- Appeal against the order of the Commissioner (Appeals) setting aside the Adjudication order.
- Denial of CENVAT Credit on capital goods due to availing benefits of Notification No.214/1986-CE.
- Use of capital goods for dutiable and exempted goods leading to the denial of CENVAT Credit.
- Comparison with Tribunal's decision in the Respondent's earlier case.
- Reference to various legal decisions in support of the Respondent's case.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner (Appeals) setting aside the Adjudication order. The Respondents were involved in the manufacture of Iron & Steel Castings with two units. Unit No.2 had taken CENVAT Credit on capital goods while undertaking job work for Unit No.1 under Notification No.214/1986-CE. The Adjudicating authority denied the credit, but the Commissioner (Appeals) overturned this decision.

2. The Commissioner (Appeals) noted that the Respondents had also cleared consignments by paying duty and used capital goods for both dutiable and exempted goods. Consequently, the CENVAT Credit could not be denied based on this ground. This decision was supported by the Tribunal's earlier ruling in the Respondent's case, where a similar appeal by the Revenue was dismissed.

3. The Tribunal, after considering the arguments and perusing the records, found no reason to interfere with the order of the Commissioner (Appeals). The appeal filed by the Revenue was rejected based on the consistent application of legal principles and precedents. The Respondent's reliance on various legal decisions further strengthened their case and contributed to the rejection of the Revenue's appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT AHMEDABAD upheld the decision of the Commissioner (Appeals) in favor of the Respondent, emphasizing the proper utilization of capital goods for both dutiable and exempted goods as a valid ground for claiming CENVAT Credit. The reference to past legal judgments and the consistency in legal interpretation played a crucial role in rejecting the Revenue's appeal.