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2023 (8) TMI 119 - AT - Central ExciseCENVAT Credit - input - Helmet lock, supplied along with the Motorcycles - essential accessory of the Excisable goods or not - merits classification under heading no. 87.14 of Central Excise Tariff Act or not - CBEC vide Circular No. 24/90-CX-4 dated 11/07/1990 - HELD THAT - The CBEC Circular classifies the helmet locks under heading no. 87.14 of CETA, i.e as part of Motorcycles - it is found that the definition of input during the relevant period includes accessories of the final products; as long as an input is an accessory to the Excisable goods manufactured and cleared, credit cannot be denied. Moreover, contrary to the contention of the learned Authorized Representative, the definition does not prescribe the part/component to be an essential accessory. As long as the input in question is an accessory, it qualifies to be an input as per Section 2(k) of Central Excise Act, 1944. It is not Revenue s case that the Helmet lock is not an accessory. Such a conclusion runs contrary to the classification approved by CBEC. As there is no change in the legal provisions for the subsequent period, credit is admissible in the previous period which is impugned in this case. Therefore, the impugned order is not legally sustainable and therefore, liable to be set aside. Appeal allowed.
Issues involved:
Revenue demands CENVAT credit on Helmet lock supplied with Motorcycles - Admissibility of CENVAT credit on Helmet lock as an essential accessory of Excisable goods. Details of the Judgment: Issue 1: Admissibility of CENVAT credit on Helmet lock The Revenue demanded CENVAT credit of Rs.2,82,34,630/- from the appellant, M/s Hero Moto Corp I Ltd., for the Helmet lock supplied with Motorcycles, arguing that it is not an essential accessory of the Excisable goods. A Show Cause Notice was issued, and the demand was confirmed along with interest and penalties. Appellant's Argument: The appellant contended that the provision of Helmet is a requirement under the Motor Vehicle Act and Rules, and the Helmet lock falls under the definition of "input" used in the manufacture of the final product. They cited various decisions and circulars supporting the classification of Helmet locking devices as essential accessories for two-wheelers. The appellant also highlighted that the Revenue had previously allowed CENVAT credit on Helmet locks for a subsequent period in the appellant's own case, which was not appealed against, thus attaining finality. Revenue's Argument: The Revenue reiterated the findings of the impugned order, stating that some motorcycles were cleared without the Helmet locking systems, indicating that the Helmet lock is not an essential accessory of the Motorcycles, justifying the denial of CENVAT credit. Judgment: Upon reviewing the records and relevant provisions, the Tribunal found that the CBEC Circular classified Helmet locks under heading no. 87.14 of Central Excise Tariff Act, as part of Motorcycles. The definition of "input" during the relevant period included accessories of the final products, without specifying the part to be an essential accessory. As long as the input is an accessory to the Excisable goods, credit cannot be denied. The Tribunal emphasized that the Helmet (and lock) is required to be supplied with the motorcycles as per statutory provisions, making it an "input" for the manufacture of Motorcycles. Additionally, the Tribunal noted that the Revenue had accepted the appellant's contention and allowed CENVAT credit for a subsequent period, indicating the admissibility of credit for the previous period in question. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per law. This summary provides a comprehensive overview of the issues involved in the legal judgment, the arguments presented by both parties, and the Tribunal's detailed analysis leading to the final decision.
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