2015 (1) TMI 1038 - AT - Central Excise

CENVAT Credit - Capital Goods - Held that - it is not disputed that subject items were used by the respondent in manufacturing of capital goods. Therefore there is no requirement of quantification of the quantity used in the manufacture of capital goods. The respondents are entitled to take Cenvat credit of the subject items which were used by the respondent for manufacturing of capital goods. Following decision of CCE Tiruchirapalli vs. India Cements Ltd. reported in 2013 (1) TMI 5 - Madras High Court - Decided against Revenue.

Summary

Issues:
1. Entitlement to Cenvat credit on items used in manufacturing capital goods.

Analysis:
The judgment involves an appeal by Revenue against an order allowing Cenvat credit to the respondent for items used in manufacturing capital goods. The Commissioner (Appeals) had ruled in favor of the respondent, stating that the items falling under Chapter 72 of the Central Excise Tariff Act, used by the respondent in manufacturing capital goods, entitle them to Cenvat credit.

The case revolved around the respondent procuring goods for manufacturing capital goods and claiming Cenvat credit on them. The adjudicating authority initially denied the credit, citing that the goods were used for construction purposes, not for manufacturing capital goods. The Commissioner (Appeals) disagreed, allowing the credit based on the respondent's explanation and evidence of usage for manufacturing capital goods.

The Appellate Tribunal noted that the respondent had indeed used the items in question for manufacturing capital goods, eliminating the need for quantification of the quantity used. The Tribunal referred to a previous case law to support the decision that the respondent was entitled to Cenvat credit for the items used in manufacturing capital goods.

The Tribunal upheld the Commissioner (Appeals) decision, emphasizing the detailed submission and evidence provided by the respondent regarding the use of the items in technical structures for manufacturing capital goods. The Tribunal agreed that the requirement for goods to be considered capital goods was satisfied by their use in machines and machinery, dismissing the Revenue's appeal and affirming the entitlement of the respondent to Cenvat credit on the items in question.

In conclusion, the judgment settled the issue of entitlement to Cenvat credit on items used in manufacturing capital goods, affirming the respondent's right to claim the credit based on the evidence of usage provided and the satisfaction of the criteria for considering the goods as capital goods.