2005 (2) TMI 296 - AT - Central Excise

Summary

Issues: Availability of Cenvat Credit in respect of Special Boiling Point Spirit (SBPS)

Analysis:
The main issue in the judgment revolves around the availability of Cenvat Credit in respect of Special Boiling Point Spirit (SBPS). The assessee, a manufacturer of adhesives and organic composite solvents, availed Cenvat Credit on inputs including Cixon and SBPS. The Revenue disallowed the credit, arguing that these inputs were excluded from the definition of inputs under the Cenvat Credit Rules, 2002, as they were considered motor spirit commonly known as petrol. The learned Advocate for the assessee contended that SBPS is not commonly known as petrol and provided various arguments and evidence to support this claim. He referred to relevant notifications, industry standards, and expert opinions to establish that SBPS should not be classified as petrol. On the other hand, the learned D.R. for the Revenue argued that motor spirit and petrol are synonymous, citing definitions from the Petroleum Act and industry standards. The Revenue also highlighted that the inputs were supplied with excisable invoices explicitly stating "No Modvat," indicating that Cenvat Credit should not have been availed. The Tribunal analyzed the definitions and classifications of motor spirit, petrol, and related products under the Central Excise Tariff Act, ultimately concluding that the Revenue failed to prove that the inputs in question were commonly known as petrol. Therefore, the Tribunal allowed the appeal filed by the assessee, ruling that the inputs were not excluded from the definition of inputs in the Cenvat Credit Rules, and the assessee was eligible to avail the Cenvat Credit. Consequently, the question of imposing any penalty on the assessee did not arise, leading to the rejection of the Revenue's appeal.