2018 (3) TMI 452 - AT - Central Excise

CENVAT Credit - It is the submission that the jumbo bags were utilised outside the factory premises in the port and hence not eligible for CENVAT credit - Held that - the CENVAT credit is availed on Jumbo bags which were delivered to C&F agents, taken to port and raw-sugar imported in bulk is packed and brought back to the factory for purification purposes. In the entire case, it is undisputed that the CENVAT credit availed jumbo bags were used for transportation of raw-sugar from the port to the factory premises of the appellant. Revenue has not effectively countered the factual position in order to take a different view than what has been already taken by the adjudicating authority. Appeal dismissed - decided against Revenue.

Summary

Issues:
- CENVAT credit eligibility on jumbo bags used for transportation and storage of imported raw sugar outside the factory premises.

Analysis:
The appeal was filed by the Revenue challenging the order allowing CENVAT credit on jumbo bags used for transporting raw sugar from the port to the factory for further processing. The Revenue argued that since the jumbo bags were used outside the factory premises and the imported raw sugar was exempted, CENVAT credit should not be allowed. The Revenue relied on previous tribunal decisions and case laws to support their position. The adjudicating authority recorded that the jumbo bags were indeed used for transportation and storage of raw sugar within the factory premises. The authority cited the arguments presented by the assessee, highlighting the necessity of jumbo bags in the manufacturing process to prevent deterioration of raw sugar. The authority also referenced relevant case laws supporting the inclusion of such items as inputs eligible for credit. The authority concluded that the jumbo bags met the definition of inputs and were essential in the manufacturing process, thus dropping the proceedings.

The appellate tribunal, after considering the submissions and factual position, found that the Revenue had not effectively countered the factual position established by the adjudicating authority. The tribunal noted that the impugned goods, jumbo bags, were used for transportation from the port and subsequent storage within the factory for further manufacturing processes. The tribunal upheld the adjudicating authority's decision, stating that the impugned order was correct and legal, requiring no interference. The tribunal differentiated the current case from previous cases cited by the Revenue, emphasizing the unique factual matrix involved in the present matter. Consequently, the tribunal rejected the appeal and upheld the order allowing CENVAT credit on the jumbo bags used for transporting and storing raw sugar.

In conclusion, the tribunal affirmed the decision of the adjudicating authority, ruling in favor of the assessee regarding the eligibility of CENVAT credit on jumbo bags utilized for transporting and storing imported raw sugar within the factory premises. The tribunal found the factual position and legal arguments presented by the assessee to be compelling and in line with the definition of inputs essential for the manufacturing process, leading to the rejection of the Revenue's appeal.