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2013 (12) TMI 578 - AT - Central Excisecenvat credit availed on inputs and on capital goods - Eligibility for cenvat credit of distribution control system of co-generator Held that - The definition of capital goods as given in Explanation 57 Q specifically covered the goods (other than of a kind used for refrigerating and airconditioning appliances) falling under Heading no.90.32 and also the components /spares and accessories of the goods of Heading No.90.32 - the DCS System is an item falling under Heading No.90.32, the same was specifically covered by the definition of capital goods and the low frequency transmission system, which is part of the DCS System, would also covered by the definition of capital goods - thus denial of capital goods is not sustainable. Cenvat credit on welding machines and welding electrodes Used for repair and maintenance of the plant and machinery Held that - Following JAWAHAR MILLS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, COIMBATORE 1999 (4) TMI 153 - CEGAT, NEW DELHI - welding electrodes and welding machines is eligible for cenvat credit thus denial of cenvat credit in respect of these items is also not sustainable - Decided Partly in favour of Assessee.
Issues:
Dispute over eligibility for cenvat credit of distribution control system of co-generator and other items of capital goods and inputs. Analysis: The appellant, a manufacturer of sugar and molasses, availed cenvat credit on capital goods including a distribution control system of a co-generator, welding machines, and high-speed diesel during the period from December 1995 to August 1996. The dispute arose when the department contended that the appellant was not eligible for cenvat credit on these items. The show cause notice sought recovery of wrongly availed cenvat credit amounting to Rs. 5,94,395. The Addl. Commissioner confirmed this demand, imposing interest and penalty. On appeal, the Commissioner (Appeals) upheld the denial of cenvat credit. The appellant then filed an appeal against this order. The appellant argued that the distribution control system of the power generation system, classified under Heading No. 90.32 of the Tariff, is eligible for cenvat credit as it falls under the definition of capital goods as per Rule 57Q of the Central Excise Rules. They also contended that the co-generator system is part of the distribution control system and should be considered a capital good. The appellant referenced a Tribunal judgment regarding welding machines and electrodes being eligible for cenvat credit, which was upheld by the Apex Court. The appellant confessed denial of cenvat credit only in respect of the capital goods amounting to Rs. 5,94,395. The Joint CDR defended the impugned order, reiterating the findings of the Commissioner (Appeals). The Tribunal, after considering the submissions and records, held that the distribution control system and low-frequency transmission system are covered under the definition of capital goods as per the Central Excise Rules. Additionally, the Tribunal cited the judgment regarding welding machines and electrodes being eligible for cenvat credit. Consequently, the denial of cenvat credit for these items was deemed unsustainable. The Tribunal upheld the impugned order, setting aside the denial of cenvat credit for welding machines, welding electrodes, and components of the distribution control system of the co-generator plant. The denial of cenvat credit amounting to Rs. 5,54,395 for these items was reversed, partially allowing the appeal with consequential relief.
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