2015 (11) TMI 453 - AT - Central Excise

Availment of CENVAT Credit - Capital goods - Held that - Jumbo electric /battery operated platform truck, hot metal transport vehicle, trailer assembly and ladle transfer car are specially designed for operational use inside the appellant s factory. These items are part of overall machinery system critically contributing to manufacture of final product - are not transfer vehicles or trucks for common public transport of goods. As admitted in the proceedings, they are specially designed for industrial purpose and the operate within narrow scope of factory premises. In the case of Bhusan Steel Ltd. (2012 (10) TMI 306 - CESTAT, KOLKATA), this Tribunal held that diesel locomotive torpedo ladle car carrying molten metal not only enhances the effectiveness, but without it the handling and in turn production of finished goods would not be possible. The Tribunal upheld the lower authority s order holding that diesel locomotive as accessory of capital goods. - all these equipments are correctly be considered as accessories to various capital goods involved in the manufacture of final products as they are integrally connected in the process of manufacture. Accordingly, we hold that the denial of cenvat credit for these items is not sustainable - Decided in favour of assessee.

Summary

Issues:
Denial of Cenvat Credit on various items used in the factory.

Analysis:
The appellants appealed against the denial of Cenvat Credit on items used in their factory, including Hot Metal Transport vehicle, jumbo electric platform truck, and ladle transfer car. The lower authorities rejected the credits, stating these items are not capital goods or inputs. The Commissioner (Appeals) concluded that goods used for material transportation are not eligible for credit. The appellant, an integrated steel plant, argued that the items are crucial for their production process, linking various equipment in their plant. The appellant emphasized the essential role of the impugned goods in the overall operation of their plant, detailing the specific functions of each item in the manufacturing process.

The Tribunal examined the nature of usage of the items in question, focusing on whether they could be considered eligible capital goods for credit purposes. It was established that the jumbo electric platform truck, hot metal transport vehicle, trailer assembly, and ladle transfer car were specially designed for operational use within the factory premises and contributed significantly to the manufacture of the final product. These items were not intended for common public transport but were specifically tailored for industrial purposes within the narrow scope of the factory.

Referring to previous judgments, the Tribunal highlighted cases where similar equipment was deemed essential for the manufacturing process and thus eligible for credit. The Tribunal cited the importance of accessories to capital goods in enhancing production efficiency and contributing to the manufacturing of finished goods. Drawing on legal interpretations of the term 'accessory,' the Tribunal emphasized the integral connection between the impugned goods and the manufacturing process. Ultimately, the Tribunal concluded that the denial of Cenvat Credit for the items in question was unsustainable, as they were correctly considered accessories to capital goods involved in the manufacturing process, thereby allowing the appeal with consequential relief.