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TMI Blog2023 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of cenvat credit was ordered under the provision of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944 along with interest and equal penalty under Rule 15 of the Cenvat Credit Rules, 2004 and Rule 25 of Central Excise Rules, 2002. 2. Briefly the facts of the case are that the appellant during the period of dispute was engaged in the manufacture and clearance of two wheelers and spares thereof falling under Chapter No. 87 of the Central Excise Tariff Act, 1985 and were availing the Cenvat Credit of duty paid on inputs/capital goods as per the Cenvat Credit Rules, 2004. The department entertained a view that the appellant is not entitled to avail cenvat credit on Mirror Assemble (left and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order-in-original. 5.3 He further submitted that the Commissioner of Central Excise, Delhi -III, Gurgaon in Appellant's own case vide Order-in-Original No. 53-55/ SA/ CCE/2012 dated 21.08.2012 has also allowed the Cenvat credit of duty paid on Sari Guard and Mirror Assembly. 5.4 He further submitted that following precedent decisions, the Commissioner of Central Excise, Delhi-III in Appellant's own case vide Order-in-Original No. 72/ SA/ CCE/2014 dated 24.06.2014 has also allowed the Cenvat credit of duty paid on Sari Guard and Mirror Assembly by dropping the penalties initiated vide the show cause notice. 5.5. Ld. Counsel has placed on record the decisions given by the department in their own case cited (supra). He further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motor Vehicle Rules, 1989 for manufacture of two wheelers to clear the Motor Cycle/two wheelers from the factory with a side mirror (mirror assembly) and sari guard. Ld. Counsel took us through the relevant rules 128(13)(i) and rule 123 of the Motor Vehicle Act which provides a statutory requirement under the Motor Vehicle Rules that these items, namely, mirror assembly (right & left) and sari guard in motor cycle should be fixed while clearing the final product. 5.9 Ld. Counsel further submitted that recovery is not sustainable, the interest and penalty cannot be imposed because the present case relates to interpretation issue and the appellant have not evaded any duty of Central Excise and has not suppressed or mis-declared any material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle fall within the purview of the definition of Input eligible for cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004. 7.1 In order to decide this issue, it is necessary to have a look at the relevant Cenvat Credit Rules, 2004. Rule 3 of the Cenvat Credit Rules provides that a manufacturer or producer of the final product shall be allowed to take cenvat credit on the excise duty or additional excise duty paid on any input or capital goods received in the factory for manufacture of final products. The definition of 'input' as provided under Rule 2(k) during the relevant period is reproduced herein below:- "all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol used in or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts shows that it is inclusive and wide as it is started with the words 'all goods'. The goods excluded are light diesel coil and high speed diesel coil and motor spirit which are in the nature of consumables". The High Court went on to add that "the final product cannot be given restricted meaning so as to mean as the engine of the vehicle or the chassis but all things which are necessary to make the final product marketable". The Hon'ble High Court held that "for motor vehicle, the tool kit and the first aid kit has to the part of the vehicle before the same can be put to use". It is evident that the ratio on which the Cenvat credit has been allowed in respect of tool kit and first aid kit is squarely applicable for permitting Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the final product or be used in or in relation to the manufacture of the final product. The Mirror assembly helps the driver of the Motorcycle to see the distance of the vehicles and to drive the Motorcycle carefully. It is statutorily required under Rule 128(43) (i) read with Rule 138 of the Central Motor Vehicles Rules, 1989, that 'Mirror assembly' has to be provided along with the Motorcycle. It is the admitted case that it is an accessory and the noticee has correctly taken the Cenvat credit. 59. I find that the purpose of Sari Guard which is a duty paid bought item is to protect the Sari of the woman pillion rider so that it does not get entangled with the rear/back wheel of the Motorcycle. It is thus statutorily requ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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