2017 (6) TMI 43 - AT - Central Excise

CENVAT credit - whether they are entitled to CENVAT Credit on front end loader vacuum pump and spares of crane under Rule 57 Q (1) read with explanation of the CER 1944? - Held that - from the definition in Rule 57 Q read with explanation it is evident that all items falling under Chapter 84 are eligible save and except internal combustion engines of a kind used in motor vehicles compressors of a kind used in refrigerator and air conditioning appliances and machinery expansion valves and solenoid valves of a kind used for refrigerating air conditioning appliances and machinery - the items in dispute do not fall under any of the exceptions and as such the appellant is entitled to Cenvat Credit on the same - appeal allowed - decided in favor of assessee.

Summary

Issues: Entitlement to Cenvat Credit on front end loader, vacuum pump, and crane spares under Rule 57 Q (1) of Central Excise Rules, 1944.

Analysis:
1. Issue of Entitlement to Cenvat Credit: The appellant, a manufacturer of sugar and molasses, appealed for Cenvat Credit on specific equipment under Rule 57 Q (1) of the Central Excise Rules, 1944. The appellant argued that the front end loader, vacuum pump, and crane spares are essential for their manufacturing process and fall under Chapter 84. They contended that these items are crucial for maintaining steam generation, sugar boiling process, and supply of bagasse for steam generation. The appellant cited the definition of 'capital goods' under Rule 57 Q, which includes goods falling under Chapter 84, except for specific exclusions. The appellant relied on precedents like the Madras High Court ruling and Tribunal decisions to support their claim for Cenvat Credit on similar equipment used in manufacturing processes.

2. Judgment and Reasoning: After hearing arguments from both sides, the Member (Judicial) analyzed the definition in Rule 57 Q along with the explanation provided. It was noted that items falling under Chapter 84 are generally eligible for Cenvat Credit, except for certain exclusions like internal combustion engines used in motor vehicles or compressors for specific appliances. The Member found that the disputed items - front end loader, vacuum pump, and crane spares - did not fall under any of the exceptions mentioned. Therefore, the Member held that the appellant was indeed entitled to Cenvat Credit on these items. Consequently, the appeal was allowed, overturning the decision of the learned Commissioner (Appeals) regarding the eligibility of Cenvat Credit for the mentioned equipment.

3. Consequential Benefits: The judgment concluded by stating that the appellant is entitled to consequential benefits as per the law, signifying that the appellant can claim further benefits or adjustments related to the allowed Cenvat Credit. The decision was pronounced in court, finalizing the entitlement of the appellant to the Cenvat Credit on the front end loader, vacuum pump, and crane spares under Rule 57 Q (1) of the Central Excise Rules, 1944.