2006 (2) TMI 24 - AT - Central Excise

Central Excise Job work Appellant as a job worker used duty paid capital goods for manufacture of intermediate goods is entitled to Cenvat credit Goods returned to principal manufacturer without payment of duty

Summary

Issues:
Challenging order of Commissioner regarding eligibility for CENVAT credit on capital goods used in manufacturing color TV chassis on job work basis.

Analysis:
The case involved three appeals challenging the Commissioner's order dated 28.12.2004. The issue at hand was whether the capital goods used by a company in the manufacture of color TV chassis on job work basis, cleared without payment of duty, would be eligible for CENVAT credit under Rule 6(4) of the Cenvat Credit Rules, 2001. The appellant, M/s. Samsung Electronics (I) Information and Telecommunication Ltd., relied on various case laws to support their claim. These cases included precedents such as Xpro India Limited vs. CCE, Sterlite Industries (I) Ltd. Vs. C. C.E., Vulcan Electro Controls Pvt. Ltd. Vs. CCE, and others, which supported the appellant's argument that credit on inputs used in manufacturing goods on job work basis is admissible.

The appellant argued that in previous judgments, the Tribunal had consistently held that when intermediates are transferred without payment of duty, the manufacturers included the cost of such intermediate products while clearing the final product, making them eligible for CENVAT credit. On the other hand, the Senior Departmental Representative reiterated the stance of the authorities below.

Upon examination of the case records and considering the arguments from both sides, the Tribunal noted the overwhelming decisions supporting the eligibility of CENVAT credit on inputs and capital goods used in manufacturing. The Tribunal cited previous decisions where inputs and capital goods were found eligible for CENVAT credit, and based on this consistent stance, they set aside the impugned order as not maintainable and allowed the appeals.