2013 (11) TMI 614 - AT - Central Excise

Truck Input or capital goods - Waiver of Pre-deposit Cenvat credit disallowed on JO truck for transportation of raw materials - Whether JO truck covered either under the definition of capital goods under Rule 2(d) of the Cenvat Credit Rules or the inputs as defined under Rule 2(k) of the Rules, 2004 Held that - The JO truck used for transportation of raw materials within the premises of manufacturing unit falls within the definition of inputs used in relation to the manufacture of final product Rule 3 of the Cenvat Credit Rules provides that a manufacturer can avail of Cenvat credit in respect of excise duty paid in relation to the capital goods or inputs - Use of word or in Rule 3 disjoins capital goods from inputs, as such prima facie, if the manufacturer/assessee has paid excise duty while procuring either the capital goods or the inputs he shall be entitled to avail Cenvat credit in respect of the same Prima facie, the appellant has been able to make out a strong case for waiver of the condition of pre-deposit of duty demand, interest and penalty till the disposal Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of duty demand and penalty for hearing of the appeal.

Analysis:
The appellant sought a waiver of the pre-deposit condition of duty demand and penalty amounting to Rs. 30,027/- each for the appeal hearing. The dispute arose from the disallowance of Cenvat credit claimed on a JO truck used for transporting raw materials within the manufacturing unit. The impugned order contended that the JO truck did not fall under the definition of 'capital goods' or 'inputs' as per the Cenvat Credit Rules.

The appellant's counsel argued that the JO truck qualified as an 'input' under Rule 2(k) of the Cenvat Credit Rules, justifying the Cenvat credit claim. It was emphasized that the appellant had a strong prima facie case for the waiver of the pre-deposit condition based on Rule 3 of the Cenvat Credit Rules. In contrast, the Revenue's representative contended that the JO truck did not meet the criteria of 'capital goods' or 'inputs' as defined, thus making the excise duty paid on it ineligible for Cenvat credit.

Upon examining the contentions and the relevant legal provisions, the Tribunal delved into the definition of 'input' under Rule 2(k) of the Cenvat Credit Rules, 2004. The definition encompassed goods used directly or indirectly in the manufacture of final products, irrespective of whether they were contained in the final product. The Tribunal noted that the JO truck, utilized for transporting raw materials within the manufacturing unit, fell within the ambit of inputs used in relation to the manufacture of final products.

Furthermore, the Tribunal highlighted Rule 3 of the Cenvat Credit Rules, which allowed manufacturers to avail Cenvat credit for excise duty paid on capital goods or inputs. By interpreting the disjunction between 'capital goods' and 'inputs' in Rule 3, the Tribunal concluded that if excise duty was paid on either capital goods or inputs, the manufacturer could claim Cenvat credit. Consequently, the Tribunal found that the appellant had presented a compelling prima facie case for waiving the pre-deposit condition of duty demand, interest, and penalty. As a result, the stay application was granted, and the condition of pre-deposit was waived, with recovery stayed until the appeal's final disposal. The appeal was directed to be listed in due course for further proceedings.