2018 (10) TMI 1472 - AT - Central Excise

CENVAT credit - capital goods taken on lease - whether the appellant being the lessee of the capital goods, was eligible to avail CENVAT Credit? Held that - The jurisdictional High Court has decided an identical issue in the case of Commissioner of Central Excise, Chennai-IV Vs. Ilgin Automotive (P) Ltd. 2013 (9) TMI 94 - MADRAS HIGH COURT , where it was held that There was no ground to disturb the order of the Tribunal, more so in the context of the Central Board s clarification that the job workers were entitled to claim MODVAT credit as per the Board s circular. Appeal dismissed - decided against Revenue.

Summary

Issues:
Whether the appellant as the lessee of capital goods was eligible to avail CENVAT Credit.

Analysis:
The Revenue appealed against the Order-in-Appeal passed by the Commissioner, questioning the eligibility of the appellant to avail CENVAT Credit as a lessee of capital goods. The Revenue relied on the grounds of appeal and findings of the adjudicating authority. On the contrary, the consultant for the respondent argued that various decisions, including those of the CESTAT and High Courts, supported the appellant's claim. The appellate authority had allowed the claim based on a decision of the Delhi Bench of the CESTAT and a judgment of the jurisdictional High Court. The High Court's decision highlighted the permissibility of Modvat credit for job workers, which was supported by a clarificatory letter from the Central Board of Excise and Customs. The Tribunal found the case similar to a previously decided matter involving Hyundai Motors India Limited and Sharda Motors Industries, where the issue of availing Modvat credit on capital goods was upheld. The Tribunal noted that the Revenue's challenge was unwarranted given the clarity of the Board's circular and the finality of the High Court decision in a related case. Therefore, the Tribunal dismissed the Revenue's appeal and upheld the decision allowing the appellant to avail CENVAT Credit as a lessee of capital goods.

In conclusion, the Tribunal found no grounds to interfere with the impugned Order, as the appellant's eligibility for CENVAT Credit as a lessee of capital goods was supported by legal precedents and clarifications from the Central Board of Excise and Customs. The Tribunal dismissed the Revenue's appeal and closed the connected CMP, affirming the decision of the Commissioner (Appeals). The lack of supporting case-law from the Revenue and the alignment of the present case with established legal principles led to the dismissal of the Department's appeal. The Tribunal's decision was based on a thorough consideration of the arguments, legal precedents, and the specific circumstances of the case, ultimately upholding the appellant's right to avail CENVAT Credit as a lessee of capital goods.