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TMI Blog2024 (10) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... of the credit of the same by the appellant which had initially taken the credit on the same as capital good. Therefore, taking of credit has not been found to be wrong by the Adjudicating Authority as such. CENVAT credit on Araldite - HELD THAT:- It is found that because of their mechanical properties and resistance to chemical and suitability for prevention of formation of rust, levelling etc., they are used in fermentation tanks on the interior and exterior surfaces providing a barrier against corrosive substances. Therefore, once the Adjudicating Authority has held Epoxide Resin as capital goods, by the same logic even Araldite would also be considered as capital goods. Therefore, in view of the facts of the case and its use in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29.01.2024, confirming the demand of Rs. 1,33,312/- on account of ineligible credit on capital goods and Rs. 1,25,239/- on account of ineligibility for taking credit on inward transport of capital goods paid on Reverse Charge Mechanism (RCM). 2. The case, in brief, is that the Department noticed that the appellants have been engaged in the manufacture of Ethanol, Industrial Alcohol and Potable Alcohol as also Extra Neutral Alcohol and Rectified Spirit. They are also engaged in the manufacture of by product Fusel Oil and Carbon dioxide and availing Cenvat Credit of duty paid on capital goods as well as input services. The demand totaling of Rs. 2,41,93,278/- was issued on the grounds that certain capital goods have been used exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and based on explanations and information considered Epoxide Resin as capital goods but held that Araldite and Molecular Seives as are in the nature of consumables. He has also held that these 2 items would be otherwise eligible for input credit/consumable. However, he has also considered that since these two items namely Araldite and Molecular Seives are in the nature of inputs/consumables on which they have taken credit and utilised the same in manufacture of both dutiable and exempted goods. Therefore, since the assessee had not chosen any option under Rule 6 of CCR 2004, the demand was worked out under Rule 6(3A) i.e. credit attributable to inputs used in exempted goods amounting to Rs. 1,33,312/-. He also held that they are liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , [2002 (147) ELT 508 (Tri-Del) and Reliance Industries Ltd., Vs Commissioner of Central Excise, Surat I [2004 (178) ELT 529 (Tri- Mumbai)] the issue is no longer res integra. The Molecular Seives has been treated as inputs and not as capital goods. Therefore, the Commissioner is correct in holding this item as consumable or input. 6. Heard both the sides and perused the records. 7. I find that the issue raised in the show cause notice dated 01.08.2011 is more or less settled by the Original Adjudicating Authority by dropping the demand of Rs. 2,40,59,966/- out of total demand of Rs. 2,41,93,278/-. He has only confirmed an amount of RS. 1,33,312/- on account of ineligible credit attributable to Molecular Seives and Araldite and Rs. 1,25,329 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile deciding the eligibility of Araldite based on information from Wikipedia site has, inter alia, held that the Epoxide Resin are used for coating the metal machinery which is essential to prevent rust formation and to prevent any rust contamination in the chemical processes and therefore, would be classifiable as accessory of the machinery in which they have been used and therefore he held Epoxide Resins rightly classifiable as capital goods and Cenvat Credit was found to be eligible. From the discussions given for Epoxide Resins, I find that because of their mechanical properties and resistance to chemical and suitability for prevention of formation of rust, levelling etc., they are used in fermentation tanks on the interior and exterio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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