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2018 (5) TMI 966 - AT - Central ExciseCENVAT credit - capital goods - graphite bush, racks and table stand - Held that - graphite bush is explained to have been used in VMC machines and is a part of hydraulic clamping system - graphite bush is lubricant moving parts while use of the racks and table stand are for storage of input/parts at the assembly line. The items are used in the factory premises of the appellant and the definition of inputs during the period in question i.e. June and July 2013, the definition allows CENVAT credit of the duty paid on any goods used in the factory of the manufacture - It is undisputed that the appellant is a manufacturer of goods. Credit allowed - Appeal allowed - decided in favor of appellant.
Issues:
Denial of CENVAT credit on graphite bush, racks, and table stand as capital goods. Analysis: The appeal challenged the Order-in-Appeal denying CENVAT credit on specific items. The lower authorities had refused credit, asserting that the items were not capital goods. Upon review, it was found that the graphite bush was utilized in VMC machines as part of the hydraulic clamping system. Additionally, the racks and table stand were used for storage purposes at the assembly line. The appellant's factory premises housed these items, and as per the definition of inputs during the relevant period, CENVAT credit was permissible for goods used in the manufacturing facility. Notably, previous Tribunal decisions, such as Geltec Pvt. Ltd. and Banco Products (India) Ltd., supported this interpretation. Consequently, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. Conclusion: The Tribunal, after considering the arguments and precedents, concluded that the denial of CENVAT credit on the graphite bush, racks, and table stand was unjustified. By establishing the essential role of these items in the manufacturing process and citing relevant legal interpretations, the Tribunal overturned the lower authorities' decision and granted relief to the appellant.
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