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TMI Blog2023 (10) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... ARTI AIRTEL LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2012 (4) TMI 362 - CESTAT, MUMBAI] observing there is no direct nexus between this item and the output service provided by the appellant. The appellant has not established sufficient nexus between printers and their output service. Cenvat credit on the packing material which was delivered at the warehouses located at Lawrence Road, Delhi - HELD THAT:- There are no much justification in the order, it is settled principle in law till the time it can establish that the inputs were used in or in relation to manufacture and clearance of the finished products. The Cenvat credit in respect of the same cannot be denied. It is also the depot has been considered as the place of the clearance for the excisable goods, warehouse where these boxes were delivered is a depot of the appellant from where sugar was cleared after being repacked in these corrugated boxes, these facts are not in dispute. Cenvat credit of Rs.41,078/- taken in respect of these packing materials is held to be admissible and remaining credit of Rs.29,341/- + Rs.23,610/- =Rs.52,951/- is held to be not admissible to the appellant. In the respect of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Rules 2004, clearly provide that the credit is admissible in respect of duty paid on inputs received in the factory of the manufacture of final product. The relevant portion of the said rule is placed hereunder: RULE 3. CENVAT credit. - (l) A manufacturer or producer of final products or a [provider of output service] shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of- (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act: paid on - (i) any input or capital goods received in the factory of manufacture of final product or [by] the provider of output service on or after the 10th day of September, 2004; C2 In the instant case the fact is not disputed that the inputs/goods in question were delivered at Lawrence Road, Delhi and not in the factory premises of the appellant. Further, there are no evidences to show that the same have been used for the manufacture of the final products. Therefore no CENVAT credit is admissible on the same, as rightly denied by the adjudicating authority. 2.1 A Show cause notice was issued to the appellant demanding wrongly availed C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the mines are eligible for credit in the factory of cement manufacturer. In the case of Hawkins Cookers Ltd. Vs CCE, Mumbai-III-2014 (299) ELT 103 (Tri.-Mum) credit has been allowed on packing material purchased and used by the assessee at the depot. 3.3 Learned Authorised Representative appearing for the revenue submits that- During the relevant period the cartridge and printers used in the office were not included in the definition of capital Goods, and were specifically excluded; Further there is no evidence that these goods were directly or indirectly used in the manufacture of final product; As per Rule 9 (5) of CENVAT Credit Rules, 2004 the onus to establish the admissibility of CENVAT Credit has been cast on the manufacturer or the provider of output service taking the credit; Undisputedly the corrugated boxes were not received in the factory premises of the appellant and no evidence has been produced to show that the same were used in manufacture of finished goods; For the reasons as stated above the impugned order cannot be faulted and the appeal be dismissed. 4.1 I have considered the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts whether directly or indirectly and whether contained in the final product or not. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed. 4.6 Rule 2 (a) of the Cenvat Credit Rules, 2004 read as follows: RULE 2. (a) capital goods means:- (A) the following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805. grinding wheels and the like, and parts thereof falling under heading 6804 and wagons of sub-heading 860692 of the First Schedule to the Excise Tariff Act; (ii) .... (iii) components, spares and accessories of the goods specified at (i) and (ii); to (viii)... used- (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in office or:.... . The items namely printers and the printer cartridges though covered by the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts but does not include any equipment or appliance used in the office and those used for providing output service. A combined reading of sub-clause (a)(A)(i) and (iii) and sub-rule (2) indicates that only the category of goods in Rule 2(a)(A) falling under clauses (i) and (iii) used for providing output services can qualify as capital goods and none other. ... 31. In the light of the aforesaid discussion we examine whether on the rules as they stand the appellants would be entitled to the credit of the duty paid on the item in question on the output service namely the cellular service. We may observe that a plain reading of the definition of capital goods as defined under Rule 2(a)(A) of the Credit Rules show that all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, Heading No. 6805, grinding wheels and the like, and parts thereof falling under Heading 6804 of the First Schedule to the Central Excise Tariff Act; pollution control equipments; components, spares and accessories of the goods specified at sub-clauses (i) and (ii) which are used either in the factory for manufacture of final products but does not include any equipment or appliance use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production, and as provided in sub-clause (ii) all goods except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. Explanation (2) of sub-rule (k) is also which provides that input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. A plain reading of the definition of input indicates that in the present context, clause (i) of Rule 2(k) may not be of relevance as same pertains to manufacturing activity and pertains to goods used in relation to manufacture of final product or any other purpose within the factory of production. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts are not in dispute. 4.8 I do not find any merits in denying the credit in respect of the packing materials so used in case of Hawkins Cookers Ltd. Vs CCE Mumbai-III 2014 (299) ELT 103 (Tri-Mum) following has been held:- 3. The case of the department is that the packing material (extra carton, etc.) was not used in the factory of production and hence Cenvat credit of duty paid on such packing material was not available to the appellant in terms of Cenvat Credit Rules, 2004. In the year 2004, in the course of audit for the period 2001-05, it was pointed out by the department that the Cenvat credit taken on the extra (master or single) cartons would not be allowed as the same was not used in the factory of production, but are used in the depot of the appellant for packing of the cookers. On this objection being raised by the Revenue, the assessee immediately reversed the credit availed under protest totaling Rs. 6,25,561/- (duty of Rs. 4,73,859/- vide Entry No. 956, dated 29-12-2004 for the period from April, 2001 to Sept., 2004 and Rs. 1,51,702/- vide Entry No. 216, dated 16-6-2005 for the period October, 2004 to May, 2005). After such reversal of duty, the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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