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2016 (3) TMI 103 - AT - Central ExciseCENVAT credit on inputs and capital goods denied - commissioner allowed the claim - Held that - Tribunal in the case of Star Paper Mills Limited. Vs. Collector of Central Excise, Meerut (1998 (10) TMI 197 - CEGAT, NEW DELHI ) held that the bold rolled coil in plate form used in the manufacture of storage and processing tanks which in turn are used as capital goods in the manufacture of paper, eligible for CENVAT credit. The Hon ble Karnataka High Court in the case of Commissioner of Central Excise, Mysore vs ICL Sugars Limited )2011 (4) TMI 1065 - KARNATAKA HIGH COURT ) held that tank in factory premises for storing by product, subsequently sold as finished product, raw materials used in manufacture of tank viz. plates/bottom of plates/roof plates etc., eligible for MODVAT credit. The Tribunal in the case of Commissioner of Central Excise, Meerut-II vs. DSM Sugar (2012 (9) TMI 494 - CESTAT, NEW DELHI ) held that Paint, varnish, thinner etc., used in the manufacture of sugar is eligible for MODVAT credit. The Hon ble Supreme Court in the case of Commissioner of Central Excise, Jaipur vs Rajasthan Spinning & Weaving Mills Limited (2010 (7) TMI 12 - SUPREME COURT OF INDIA ) held that the iron & steel items are required for fabrication for chimney as integral part of the generator set, as eligible for MODVAT credit. I find that there is no dispute these items were used in or in relation to the manufacture of final products as inputs or as capital goods. - Decided against revenue
Issues:
1. Denial of CENVAT credit on inputs and capital goods. 2. Proper examination of the definition of capital goods. 3. Classification of items under Chapter 72 and 73. 4. Merit and limitation of the appeal. 5. Suppression of fact to evade payment of duty. 6. Barred show cause notice. 7. Eligibility of various items for MODVAT credit. Analysis: 1. The appellate tribunal addressed the issue of denial of CENVAT credit on inputs and capital goods. The Commissioner (Appeals) set aside the adjudication order that denied credit on various items. The tribunal examined each item individually, such as fabricated tanks, steel tubes, and chemicals used in the laboratory. The tribunal referred to relevant legal provisions and previous judgments to determine the eligibility of these items for credit. 2. The tribunal considered whether the definition of capital goods was properly examined by the authorities. The authorized representative for the Revenue argued that certain iron and steel items used for replacement of worn-out parts did not fall under the definition of capital goods. The tribunal analyzed the classification of these items under Chapter 72 and 73 and compared it to the relevant rules to make a decision. 3. The issue of merit and limitation of the appeal was also discussed. The advocate for the Respondent contested the appeal on its merits and raised concerns about the limitation period for the show cause notice. The tribunal reviewed the arguments presented by both sides and assessed whether the appeal had merit based on the facts and legal provisions. 4. The question of suppression of fact to evade payment of duty was raised during the proceedings. The Respondent's advocate claimed that there was no suppression of facts and that the show cause notice issued was time-barred. The tribunal considered these assertions in light of the evidence and legal principles to make a determination. 5. The tribunal delved into the eligibility of various items for MODVAT credit based on precedent and legal interpretations. Citing cases such as Star Paper Mills Limited and Commissioner of Central Excise vs. ICL Sugars Limited, the tribunal analyzed the usage of items like paint, varnish, and iron & steel in relation to the manufacture of final products. The tribunal found that the items in question were indeed eligible for MODVAT credit and upheld the decision of the Commissioner (Appeals) to reject the Revenue's appeal. In conclusion, the appellate tribunal thoroughly examined each issue raised, considered legal provisions, precedent cases, and the arguments presented by both parties to deliver a well-reasoned judgment upholding the decision of the Commissioner (Appeals) in favor of the Respondent.
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