2018 (7) TMI 603 - AT - Central Excise

CENVAT credit - Capital goods - Tipper Trucks - Held that - The trucks play a vital role in the movement of raw material within the factory and without these trucks the movement of material would be adversely impacted which would affect the manufacture of final product - This Tribunal in the case of Tata Steel Ltd. v. CCE, JSR 2012 (10) TMI 647 - CESTAT, KOLKATA has held that coke transfer cars used for the transportation of coke from oven to furnace is a material handling equipment without which coke could not be transferred to the furnace, and is eligible for CENVAT credit. Further, the contention of the Revenue that they were unaware of the availment of credit by the appellant on the impugned goods cannot be accepted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Original regarding irregular utilization of Cenvat credit on 'Tipper Trucks' under Central Excise Tariff Act, 1985.

Analysis:
The appellant, engaged in sponge iron manufacturing, availed Cenvat credit on 'Tipper Trucks' under chapter subheading 87042319. A show cause notice alleged irregular utilization of Cenvat credit amounting to ?5,31,169/-, contravening Cenvat Credit Rules, 2004. The Commissioner (Appeals) reduced the demand to ?1,69,409/-, to be recovered with interest and penalty, which the appellant appealed before the Tribunal.

The appellant's consultant argued that the trucks were used exclusively within the factory for material handling. He cited precedents to support admissibility of credit on material handling machinery. The Revenue contended that the trucks did not qualify as 'input' under Rule 2(k) of the Cenvat Credit Rules. They also claimed lack of information from the appellant regarding credit availment.

Referring to a precedent, the Tribunal found that material handling equipment, like the trucks in question, was eligible for Cenvat credit. The Tribunal rejected the Revenue's claim of unawareness about credit availment, noting multiple audits and regular monthly returns filed by the appellant. The Tribunal emphasized the vital role of trucks in material movement within the factory for manufacturing the final product.

Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment was pronounced on 22.05.2018 by Shri P. K. Choudhary, Judicial Member of the Appellate Tribunal CESTAT Kolkata.