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2019 (4) TMI 429 - AT - Central ExciseCENVAT Credit - capital goods - SS plates and corrugated sheets purchased to cover the silo to protect from rain and sun - Wire mesh used by them to apply ceramic labelling for screen making - Welding electrodes used in repairing of plant and machinery - Other spares such as chair rollers, rayon tapes for printing machines - OSM projects - all these items were purchased post 01.4.2011. Held that - It is not in dispute that all the goods in question were received in the factory after 01.04.2011 and that the term input has been enlarged in CCR, 2004 on 01.04.2011 to include all goods used in the factory by the manufacturer of the final products. Once these goods are received in the factory and have been used in the factory, they get covered by the term input unless they fall under the one of the categories of exclusion - A plain reading of the clause B makes clear the exclusion with reference to the inputs used in such works contract service or laying foundation or making or structures for support of capital goods. Clearly none of the goods in question fall in this exclusion because they have not been part of any works contract services - The appellant is entitled to CENVAT credit on the disputed goods in terms of revised definition of inputs w.e.f. 01.4.2011. Excess credit availed in respect of three invoices - Held that - This issue needs verification and accordingly for the limited purpose of verifying if the appellant had the other two invoices mentioned by them and if so if those are taken into account, the CENVAT credit can be explained, the matter is remitted back to the original authority for verification. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Dispute regarding entitlement to CENVAT credit on various items. 2. Interpretation of the definition of 'input' under CENVAT Credit Rules, 2004. 3. Allegation of excess CENVAT credit availed on specific invoices. Analysis: Issue 1: Dispute regarding entitlement to CENVAT credit on various items The appellant, a manufacturer of glass bottles, availed CENVAT credit under CENVAT Credit Rules, 2004. The dispute arose regarding the eligibility of availing credit on items such as SS plates, corrugated sheets, wire mesh, welding electrodes, spares, and OSM projects. The department contended that these items did not qualify as capital goods for CENVAT credit. The appellant argued that these items were used within the factory for manufacturing final products, making them eligible as inputs under the revised definition effective from April 1, 2011. The Tribunal analyzed precedents and held that the disputed goods fell under the definition of inputs, entitling the appellant to CENVAT credit on these items. Issue 2: Interpretation of the definition of 'input' under CENVAT Credit Rules, 2004 The Tribunal examined the revised definition of 'input' under CCR, 2004 effective from April 1, 2011. The definition encompassed goods used in the factory for manufacturing final products. The department argued that goods related to construction and laying of foundation were excluded from CENVAT credit. However, the Tribunal found that the disputed goods did not fall under the exclusion clause and were used directly in the manufacturing process. Consequently, the appellant was deemed eligible for CENVAT credit on the disputed items. Issue 3: Allegation of excess CENVAT credit availed on specific invoices The Tribunal addressed the allegation of excess CENVAT credit availed by the appellant on specific invoices. The appellant contended that the excess credit was due to a clerical error in mentioning only one invoice number in their CENVAT register while actually availing credit against three invoices. The Tribunal remitted the matter back to the original authority for verification to ascertain if the additional invoices were indeed available and justified the differential credit claimed. If verified, the appellant was to be granted the entitled credit. In conclusion, the Tribunal allowed the appeal in favor of the appellant concerning the disputed CENVAT credit items and remitted the matter for further verification regarding the alleged excess credit on specific invoices.
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