TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Cenvat Credit: Broad Definition of Inputs Upheld</h1> <h3>Commissioner of Central Excise, Delhi-I Versus Hero Honda Motors Ltd.</h3> The judgment upheld the eligibility of mirror assembly, sari guard, and tool kit as inputs for Cenvat credit based on the inclusive definition of inputs ... CENVAT credit - eligible inputs - mirror assembly - sari guard - tool kit - denial on the ground that the said items are not used in or in relation to the manufacture of the Motorcycle - Held that: - all three impugned items are cleared along with the motor cycle and the value thereof is included in the assessable value of the motor cycle - 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 - 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 - credit allowed - appeal dismissed - decided against Revenue. Issues:- Eligibility of mirror assembly, sari guard, and tool kit as inputs for Cenvat credit.- Interpretation of the definition of inputs under Rule 2(k) of Cenvat Credit Rules, 2004.- Precedent set by the judgment of CESTAT in the case of M/s. Hero Motocorp Ltd.- Applicability of Cenvat credit for tool kits and first aid kits as observed by Punjab & Haryana High Court.Eligibility of Items as Inputs:The appeal concerns the eligibility of mirror assembly, sari guard, and tool kit for Cenvat credit. The Revenue argued that these items are not used in or in relation to the manufacture of motorcycles and thus should not be considered as inputs. The dispute arose due to the amendment in the definition of inputs in Rule 2(k) of Cenvat Credit Rules, 2004. The Revenue contended that prior to the amendment, the impugned goods were not eligible to be classified as inputs. However, the CESTAT order in the case of M/s. Hero Motocorp Ltd. allowed Cenvat credit for tool kits, which was not overturned by any competent court.Interpretation of Definition of Inputs:The judgment referred to the interpretation of the definition of inputs under the Cenvat Credit Rules, emphasizing that the definition is inclusive and wide, starting with the words 'all goods.' The exclusion was limited to specific consumables. The Punjab & Haryana High Court, in a related case, allowed Cenvat credit for tool kits and first aid kits, stating that all things necessary to make the final product marketable should be considered as inputs. The High Court highlighted that for a motor vehicle, the tool kit and first aid kit must be part of the vehicle before it can be used, supporting the broad interpretation of inputs.Precedent and Applicability of Cenvat Credit:The judgment concluded that the ratio used to allow Cenvat credit for tool kits and first aid kits is directly applicable to permitting Cenvat credit for sari guard and rear view mirror assembly. The Tribunal found no merit in the Revenue's appeal, dismissing it based on the established legal principles and precedents set by previous judgments. The decision reaffirmed the broad interpretation of inputs and the applicability of Cenvat credit for items necessary to make the final product marketable, even if not directly involved in the manufacturing process.In summary, the judgment upheld the eligibility of mirror assembly, sari guard, and tool kit as inputs for Cenvat credit based on the inclusive definition of inputs and previous legal precedents. The decision emphasized the importance of considering all items necessary for making the final product marketable as inputs, even if not directly related to the manufacturing process of the product.
TaxTMI 
TaxTMI 
