2016 (8) TMI 1376 - AT - Central Excise

CENVAT Credit - inputs - fabrication, erection and installation of various capital goods and supporting structures, namely pollution control equipment, conveyor support and gallery, stock house bunker and bunker support etc. - Held that - It may be mentioned that in Rule 2(k) of the Cenvat Credit Rules, 2004 the term of input has been defined and Explanation 2 to Rule 2(k) of Cenvat Credit Rules, 2004 also states that input includes goods used in the manufacture of the capital goods, which are further used in the factory of the manufacturer. Thus, it is not necessary that the input exclusively be used in or in relation to the final product - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Claim of wrongful cenvat credit on certain input goods connected to final product.

Analysis:
The appeal was filed against the order passed by the first appellate authority regarding the wrongful claiming of cenvat credit on certain input goods by the assessee, a manufacturer of sponge iron. The department contended that the cenvat credit was wrongly claimed for fabrication, erection, and installation of various capital goods not directly related to the final product, sponge iron. However, the appellate authority allowed the claim of the assessee based on various case laws.

The term "input" under Rule 2(k) of the Cenvat Credit Rules, 2004 was crucial in this case. It was highlighted that goods used in the manufacture of capital goods, which are further used in the factory, fall under the definition of "input." Therefore, it was clarified that the input goods need not be exclusively used in or in relation to the final product, as per Explanation 2 to Rule 2(k) of the Cenvat Credit Rules, 2004.

The Tribunal referred to a previous order in the assessee's own case where a similar issue was discussed and the claim was allowed after considering the ratio of various case laws. Since the facts and circumstances remained the same during the period under consideration, the Tribunal decided not to interfere with the impugned order passed by the first appellate authority. Consequently, the appeal filed by the department was dismissed.

In conclusion, the Tribunal upheld the decision of the appellate authority regarding the claiming of cenvat credit on certain input goods connected to the final product, sponge iron, based on the interpretation of the Cenvat Credit Rules and previous case law precedents.