2017 (6) TMI 848 - AT - Central Excise

CENVAT credit - design and development charges for the 3-Wheeler project - Revenue felt that the design and development charges for the 3-Wheeler project after 6 months of sale of goods do not fall within the definition of manufacture under section 2(f) of the Central Excise Act, 1944 and the credit of ₹ 6,10,580/- taken by them was therefore, not admissible - Held that - the Ld. Commissioner (Appeals) has not given any findings on some of the substantive grounds raised by the appellant and summarised in Para 3 (2), 3(3), 3(4) and Para 3(7) of impugned order. The first appellate should have given his findings on the averments in these paragraphs and whether that has any impact on the case of the appellant. Besides, no finding has been given on the case laws relied upon by the appellants in their support. In view of the above, the matter needs to be examined afresh by the Ld. Commissioner (Appeals) - appeal allowed by way of remand.

Summary

Issues:
Admissibility of Cenvat credit on design and development charges for a 3-Wheeler project under Central Excise Act, 1944.

Analysis:
The case involved the appellants, engaged in manufacturing starter motor assembly, who purchased machines and availed Cenvat credit and education cess based on invoices. The Revenue contended that design and development charges for a 3-Wheeler project did not qualify as 'manufacture' under the Central Excise Act, resulting in a demand for duty and penalty. The appellant argued that the assessable value should include engineering work, the credit availed was valid, and the department's delay in issuing the show cause notice was time-barred. The Ld. AR supported the Commissioner's decision disallowing the Cenvat credit on design and development charges.

The Ld. Commissioner (Appeals) did not address key grounds raised by the appellant and failed to provide findings on substantive issues and case laws cited. The Tribunal noted this deficiency and ordered a remand for a fresh examination by the Ld. Commissioner (Appeals). The appellant was directed to be given a fair opportunity to present their case, and the first appellate authority was instructed to make a decision in accordance with the law. The appeal was allowed by way of remand, emphasizing the need for proper findings on the contentions and case laws presented by the appellant.

In conclusion, the Tribunal's decision highlighted the importance of addressing all substantive grounds raised by the appellant and providing proper findings on relevant issues and case laws. The case was remanded for a fresh examination to ensure a fair opportunity for the appellant to present their case and for a decision to be made in accordance with the law.