2010 (3) TMI 489 - AT - Central Excise

Cenvat credit - issue involved in this appeal filed by the Revenue is as to whether the battery chargers used in the respondent s sugar mill are eligible for capital goods Cenvat credit or not? Commissioner Appeals permitted on the ground that battery chargers being classifiable under heading 8504 40 30 of the Central Excise Tariff Act 1985 are covered by the definition of capital goods. Held that - there is no infirmity in the impugned order. The Revenue appeal is dismissed.

Summary

Issues:
- Eligibility of battery chargers for capital goods Cenvat credit.

Analysis:
The only issue in this appeal is whether battery chargers used in the respondent's sugar mill are eligible for capital goods Cenvat credit. The Commissioner (Appeals) allowed the credit, stating that since the battery chargers are classified under heading 8504 40 30 of the Central Excise Tariff Act, they fall under the definition of capital goods.

The learned SDR representing the Revenue challenged the order, while the respondent's Counsel argued that as the battery charger is classified under Chapter 85, it qualifies as capital goods. The judge noted that since the battery charger is classified under Chapter 85 and is used in the manufacturer's factory, it falls within the definition of capital goods as per Rule 2(a)(A)(i) of the Cenvat Credit Rules, 2004. The judge emphasized that for capital Cenvat credit, it is crucial that the goods are covered by the items listed in Rule 2(a)(A) and are "used in the factory of manufacturer," without the need to establish their use in relation to the manufacture of finished products. Therefore, the judge found no fault in the Commissioner (Appeals) order and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the decision that the battery chargers used in the sugar mill are eligible for capital goods Cenvat credit as they are classified under Chapter 85 and are used in the manufacturer's factory, meeting the criteria set out in the Cenvat Credit Rules.