Cce, Jaipur-Ii vs M/S.Modern Insulators
- CitationExcise Appeal No.E/51890/2014 EX. [SM]
Ratio decidendi
The rule this decision rests on
A machine or machinery permanently fastened to the earth is not, by reason of that fastening alone, rendered non-goods for the purpose of availing Cenvat credit; the Cenvat credit rules entitle a manufacturer to credit of duty paid on inputs used in or in relation to manufacture of the final product within the factory, and the Revenue's contention that fastening to the earth disqualifies the goods is unsustainable. Where a jurisdictional verification report establishes that the disputed goods are capital goods or inputs as defined, and the Department has not disputed that they conform to the definitional clauses, the goods qualify for Cenvat credit and the credit cannot be denied.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.212-213 (OPD) CE/JPR-II/2013 dated 31.12.2013 passed by the Commissioner of Central Excise (Appeals), Jaipur-II]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
CCE, Jaipur-II Appellant
Vs.
M/s.Modern Insulators Respondent
Present for the Appellant : Shri M.R. Sharma, DR
Present for the Respondent: Shri Ankit Totuka, Advocate
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 26.06.2015
FINAL ORDER NO. 53068/2015
PER: S.K. MOHANTY
The Revenue is in appeal against the impugned order dated 31.12.2013 passed by the Commissioner (Appeals), Central Excise, Jaipur holding that the respondent herein is eligible for the cenvat credit on the disputed goods. The cenvat credit has been allowed by the Commissioner (Appeals) based on the detailed verification report dated 06.12.2013 furnished by the Jurisdictional Central Excise Range Office. The Revenue has preferred this appeal on the ground that the machine/machineries installed in the factory, where the disputed goods have been used, are not to be considered as goods under the provisions of section 2 (7) of the Sale of Goods Act, 1930, and thus the disputed goods used therein can not be construed as either capital goods or inputs for the purpose of taking cenvat credit.
2. Shri M.R. Sharma, the ld. DR appearing for the appellant submits that the disputed goods by nature of their use cannot be considered as capital goods/input for the respondent and as such, the central excise duty paid on those goods are not eligible for cenvat benefit.
3. Shri Ankit Totuka, the ld. Advocate for the respondent submits that the cenvat credit has been denied by the Original Authority on the basis of statement recorded from the representative of the respondents company on 28.09.2007. According to the ld. Advocate, since the disputed goods were used in the factory during the period March, 2010 to June, 2011, such statement cannot be relied on for confirmation of the cenvat amount. Accordingly, the ld. Advocate submits that since the Jurisdictional Central Excise Range Officers upon verification of the nature and use of the disputed goods had submitted the certificate dated 06.12.2013 regarding the actual use of the goods and on the basis of such report, the ld. Commissioner (Appeals) has allowed the appeal in their favour, the stand of Department that the credit is not admissible is not proper and justifiable.
4. Heard the ld. Counsel for both the sides.
5. I find that ld. Commissioner (Appeals) by relying on the report dated 06.12.2013 regarding the actual use of capital goods/inputs has allowed the cenvat benefit to the respondent. The stand of the Revenue in this appeal that since the heavy machines/machineries, where the disputed goods have been used as inputs /capital goods are permanently fastened to the earth, the same seized to be goods for the purpose of taking cenvat credit, I do not find any justification for the said ground. The cenvat credit rules entitles a manufacturer to take cenvat credit of duties paid on inputs, subject to the condition that the goods are used in or in relation to manufacture of the final product within the factory. Further, with regard to capital goods, it has not been disputed by the Department that the said goods are not confirming to the definition clause, entitling availment of cenvat credit. Since the disputed goods as per the verification report of the jurisdictional Range Superintendent are considered as capital goods/input as held by the Commissioner (Appeals), the same qualify for the cenvat benefit and as such the credit cannot be denied. Therefore, I do not find any infirmity in the impugned order passed by the Commissioner (Appeals) and as such the appeal filed by the Revenue is dismissed.
6. Cross Objection No.53778/2014 is also disposed of.
(Dictated and pronounced in the open Court)
(S.K. MOHANTY)
MEMBER (JUDICIAL)
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