9911796707
TMI Blog2015 (10) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2) Insect Monitoring trap 3) New Serrico Pheromone involving total CENVAT credit of Rs. 77681/- availed by them during the period from August 2005 to May 2009. The authorities below have denied the CENVAT credit on the ground that the said items cannot be considered to be covered by the definition of capital goods inasmuch as they are classifiable under Chapters 29, 35 and 38. The appellant's alternative plea of treating the said items as inputs also stands rejected by the lower authorities on the ground that the same are not raw material which get consumed during the manufacture of the final product. 2. After hearing both sides duly represented by Smt L. Maithili, advocate for the assessee and Shri S. Teli, A.R. for the Revenue, I f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants having taken the credit by reflecting the same in the statutory records cannot be held to be having any malafide intention so as to invoke the longer period of limitation. Similarly they have contested the imposition of penalty and confiscation of the goods. 3. I find that the lower authorities after considering the definition of capital goods have held that the items in question do not get covered by the said definition. They have also rejected the appellant's alternative plea that they should be considered as inputs on the ground that they are not going into the manufacturing process at any stage. The appellant's plea of limitation also stands rejected by Commissioner (Appeals) by observing that they have taken the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory premises for monitoring the Tobacco beetle, which is essential." 5. As seen from above, the traps in question are required to be used for avoiding the attack by the tobacco beetles. If the same are not used, raw materials as also the final products are likely to be damaged, in which case, they would not be in a position to be cleared. The items in question, may not be strictly covered by the definition of capital goods but admittedly they are required to be used for manufacture of final product and as such can be considered as inputs. The Hon'ble Karnataka High court in the case of Rane (Madras) Ltd Vs CCE Bangalore [2009(236) ELT 33 (Kar)] has allowed the CENVAT credit on universal measuring machine used by the assessee for m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any reference or reliance on evidence. I really fail to understand that when the credit is being availed after reflecting the same in RG23A Part I& Part II, how the lower authorities can come to conclusion that there was a malafide. Mere availing of credit cannot be held to be malafide intention. Otherwise, also I find that the disputed issue is interpretation of the credit provisions and does not relate to any clandestine activities. In such a scenario, invocation of longer period of limitation cannot be appreciated. 7. Inasmuch I have set aside the demand, the imposition of penalty or confiscation of the goods are required to be set aside. I order accordingly and allow the appeal on merits as also on limitation. (Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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