2016 (10) TMI 27 - AT - Central Excise

Cenvat credit - dumpers - used in the factory as a material handling equipment for transportation of basic raw material (lime stone) to the crusher hopper for crushing - Held that - by following the decisions of the Hon ble Supreme Court in the case of Vikram Cement vs. CCE, Indore 2006 (2) TMI 1 - Supreme court and in Madras Cements Ltd. vs. CCE, Chennai 2010 (7) TMI 179 - SUPREME COURT wherein it was held that capital goods used as material handling equipments for moving the raw material are integrally connected to the manufacture of final products and, as such are eligible for credit, the impugned order is set aside. - Decided in favour of appellant

Summary

Issues: Eligibility of appellant for Cenvat credit on dumpers as capital goods or inputs.

In this case, the appellant, engaged in cement manufacturing, availed Cenvat credit on dumpers used for material handling. The dispute revolved around whether the dumpers qualified as capital goods or inputs for the purpose of claiming credit. The Original Authority denied the credit, stating that dumpers did not fall under the category of capital goods or inputs. The appellant argued that the dumpers were integral to the manufacturing process, specifically in handling raw materials for crushing, and should be considered accessories to the crushers. The appellant relied on legal precedents, including decisions by the Supreme Court and the Tribunal, which held that material handling equipment essential to the manufacturing process qualified for credit. Notably, previous cases such as Vikram Cement vs. CCE and Madras Cements Ltd. vs. CCE supported the eligibility of such equipment for credit. The Tribunal also cited cases like Malabar Cements Ltd. vs. CCE and Tata Steels Ltd. vs. CCE, where credits on similar equipment were allowed.

The Tribunal, after examining the arguments and legal precedents, concluded that the dumpers used by the appellant were indeed integral to the manufacturing process and qualified as capital goods eligible for Cenvat credit. Following the Supreme Court's ratio and previous Tribunal decisions, the impugned order denying credit was set aside, and the appeal was allowed in favor of the appellant. This decision highlighted the importance of considering the essential role of equipment in the manufacturing process when determining eligibility for Cenvat credit.