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TMI Blog2015 (9) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 9-7-2004 and clearing their finished goods without payment of duties of excise, and therefore, they were not entitled to take credit of the duty paid on inputs, in terms of the notification ibid. I also observe that there is no claim of the appellants that they were eligible for the credit on the said goods as inputs. Hence, I hold that Cenvat credit on lubricating oil/grease was not admissible to the appellants and the same has been rightly denied by the adjudicating authority. As per definition of capital goods as provided under Rule 2(a)(A)(1) of the Credit Rules, credit is admissible on capital goods specified therein, which are used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office. The only exclusion for eligibility of credit as provided under Rule 6(4) of the Credit Rules is that the capital goods should not have been used exclusively in the manufacture of exempted goods or in providing exempted services, other than the finals products which are exempt from the whole of duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Tariff Act, 1985. 2.1 The audit of the unit No. I and Unit No. II of the appellants was conducted separately by the internal audit, for the period from January, 2008 to January, 2011, it was observed that they had availed of Cenvat credit on goods namely lubricating oils, grease, articles of plastics, etc. as capital goods whereas the same were alleged to be covered under the definition of inputs as defined under Rule 2(k) of the Cenvat Credit Rules, 2004 (for brevity the credit Rules ). It was thus alleged that they were not eligible to take input credit as they were availing the benefit of Notification No. 29/2004-C.E., dated 9-7-2004, as amended and 30/2004-C.E., dated 9-7-2004, as amended and clearing their final product without payment of duty. 2.1.1 It was further alleged that they had taken credit on the strength of invoices which did not bear proper address of their unit. 2.2 The audit proposed that the Unit No. I II had wrongly availed Cenvat credit amounting to ₹ 2,02,838/- and ₹ 1,11,198/-, which was debited/deposited by both the appellants prior to the issuance of show cause notice. 2.3 Accordingly, an amount of ₹ 2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit under capital goods; that plastic crates were used for shifting of plastic bobbins/tubes wrapped with yarn, etc. and such crates were used for handling, transferring raw material, semi-finished goods in the factory hence were capital goods and relied upon the decision in the case of Banco Products (India) Ltd. v. CCE - 2009 (235) E.L.T. 636 (T) and ACE Glass Containers Ltd. v. CCE - 2010 (250) E.L.T. 110 (T); vi. that lubricating oil/grease were used for lubricating machines for smooth functioning of machines, used for the manufacture of final product and accordingly were capital goods and relied upon the decision in the case of Vipras Castings Ltd. v. CCE - 2005 (183) E.L.T. 327 (T); vii. that denial of credit on technical grounds when admissibility of credit was otherwise not in dispute, was not proper and relied upon the decision in the case of CCE v. Home Ashok Leyland Ltd. - 2007 (210) E.L.T. 178 (S.C.); viii. that substantive benefit if any could not be denied on procedural grounds and relied upon the decision in the case of CCE v. DNH Spinners - 2009 (244) E.L.T. 65 (T) = 2009 (16) S.T.R. 418 (T); ix. that the show cause notices had been issued w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llage Iraq and other in village Bhattian. Accordingly, I would refer to both the units as a single assessee, hereinafter. Any reference to demand, interest and penalty hereinafter, would mean sum total of the demand, interest and penalty raised and confirmed in respect of both the show cause notices issued to Unit No. I and II. 6.2 The above question when answered in favour of the appellants also leads to the inevitable conclusion that there is no bar in availing Cenvat credit in respect of the invoices issued in the name of any of the factories of the appellants till the name and address of such premises figures in the Registration certificate of the appellants. I have gone through representative copies of the invoices submitted by the appellants during the present proceedings and find that the appellants have taken credit on the invoices issued in the name of unit I, in unit No. II and vice versa. It is not the allegation that the invoices were not in the name of the either of the appellants and merely interchange of address won t make any difference in view of my discussions supra and accordingly, I hold that credit is admissible to the manufacturer i.e. the appellants, irres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been rightly denied by the adjudicating authority. However, since details of the credit involved on the lubricating oil/grease is not quantified separately in both the appeals cases, the jurisdictional Deputy/Assistant Commissioner, Central Excise Division, Ropar is required to re-compute the demand within 15 days of the receipt of this order and convey the same to the appellants. 8. Coming to the admissibility of credit on bobbins and plastic crates. I find that the plastic crates and bobbins are used to carry raw material, semi-finished yarn and even finished yarn. Plastic crates have specifically been adjudged vide various case laws to be accessory of machinery as they enhance the effectiveness of machine by delivering raw material in time and thereby increasing the effective working of the machine and thereafter removal of the finished goods from the vicinity of the machine. Taking into consideration that bobbins also have the same utilization to a yarn manufacturer, they also are material handling equipment only. The appellants have relied upon the decision in the case of Banco Products (India) Ltd. v. CCE - 2009 (235) E.L.T. 636 (T) and ACE Glass Containers Ltd. v. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when viewed and judged in the light of interpretation of the term accessory by various Courts, the plastic crates are required to be held as accessory only. 8.1 Although the judgment supra have been rendered in respect of plastic crates, yet as observed by me supra, the nature of the utility of both bobbins and plastic crates is the same, hence, the above judgment would apply to bobbins and accordingly I hold that bobbins would also answer the definition of accessory of a machine as are plastic crates. 8.2 I also observe that as per definition of capital goods as provided under Rule 2(a)(A)(1) of the Credit Rules, credit is admissible on capital goods specified therein, which are used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office. The only exclusion for eligibility of credit as provided under Rule 6(4) of the Credit Rules is that the capital goods should not have been used exclusively in the manufacture of exempted goods or in providing exempted services, other than the finals products which are exempt from the whole of duty of excise leviable thereon under any notification where exemption is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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