2019 (4) TMI 165

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..... cts. Therefore, the contention of the department that R & D activity is not connected to manufacturing activity in any manner is not tenable - Reliance also placed in the case of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S TIMEX WATCHES LIMITED [2017 (11) TMI 1104 - ALLAHABAD HIGH COURT] - credit allowed - appeal allowed - decided in favor of appellant.
Smt. Sulekha Beevi C.S, Judicial Member For the Appellant Shri V.S. Manoj, Adv. For the Respondent Shri L. Nandakumar, AC (AR) ORDER Brief facts are that the appellants are engaged in brake assembly and are holders of Central Excise registration. On verification of records of the assessees, it was noticed that they have procured raw materials such as, steel, aluminium, rubber etc .....

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..... manufacturer in the factory. 2.1 In this regard, he relied upon the following decisions:- (i) M/s. Sabic Innovative Plastics Pvt. Ltd., Vs CCE reported in (2015) 63 Taxmann. Com 318. (ii) M/s. Sudarsan Chemicals India Ltd., reported in 2010 (262) E.L.T.974 (iii) M/s. India Glycols Ltd., reported in 2006 (196) E.L.T.321. (iv) Commissioner of Central Excise Vs M/s. Timex Watches Ltd., reported in 2017 (10) G.S.T.L.425 (All.). 3. Learned Authorised Representative Shri L. Nandakumar appeared and argued the matter. He vehemently argued that the inputs and capital goods have not been used for manufacture of final products. The credit has been denied only for those inputs and capital goods, which were used in the R & D activity by the a .....

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..... make it commercially feasible and economically viable, and to improve the quality and marketability of the finished products. Therefore, the contention of the department that R & D activity is not connected to manufacturing activity in any manner is not tenable. The decision relied upon by the Authorised Representative for the Revenue is for the period prior to the amendment of the definition of "inputs" as well as "Capital Goods". On perusal of the decisions relied by the learned counsel for the appellants, it is held that R & D activity is required for carrying on manufacturing activity. The decisions have held that inputs and capital goods used in R & D are eligible for credit. 6. From the foregoing, after appreciating the facts and fol .....

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