2014 (2) TMI 160 - AT - Central Excise

Denial of CENVAT Credit - Appellants are engaged in the activity of manufacture of moulds and dies and also undertaken the activity of repairing the same - Held that - whatever duty has paid by the appellants while received the moulds and dies for repairing purpose they have taken the credit which are entitled to them as per Rule 16 of CENVAT Credit Rules, 2002. In these circumstances, I do not find any merit in the impugned order and hold that as the appellants are discharging duty equivalent or more than the credit availed by them therefore they are not require to reverse the credit taken on the moulds and dies. In these circumstances, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues Involved: CENVAT credit eligibility on moulds and dies received for repairs.

Analysis:

Issue 1: CENVAT Credit Eligibility
The main issue in this case pertains to the eligibility of CENVAT credit on moulds and dies received by the appellants for repair purposes. The appellants procured moulds and dies from their own unit for repair and paid duty on the invoices issued to them. The question at hand is whether the appellants are entitled to CENVAT credit on these moulds and dies. The revenue argues that since the moulds and dies are not inputs or capital goods, the appellants should not receive CENVAT credit on them. However, it is observed that the appellants have paid duty on the moulds and dies when received for repair purposes, and they have rightfully taken the credit as per Rule 16 of the CENVAT Credit Rules, 2002.

Analysis of Judgment:
The judgment delivered by Shri Ashok Jindal states that the appellants are entitled to the CENVAT credit on the moulds and dies they received for repair purposes. The judge noted that the duty paid by the appellants on the moulds and dies entitles them to take the credit, as per Rule 16 of the CENVAT Credit Rules, 2002. It was further emphasized that since the appellants are discharging duty equivalent to or more than the credit availed by them, there is no requirement for them to reverse the credit taken on the moulds and dies. Therefore, the impugned order denying the credit is set aside, and the appeals are allowed with any consequential relief deemed necessary.

In conclusion, the judgment rules in favor of the appellants, affirming their entitlement to CENVAT credit on the moulds and dies received for repair purposes. The decision is based on the appellants' compliance with the relevant rules and their payment of duty on the said items. The judgment provides clarity on the issue of CENVAT credit eligibility in such circumstances and sets a precedent for similar cases in the future.