2017 (4) TMI 1329 - AT - Central Excise

Tribunal permits Cenvat credit for plant equipment assembly

Commissioner of Central Excise, Ghaziabad Versus Samtel Color Ltd.

Commissioner of Central Excise, Ghaziabad Versus Samtel Color Ltd. - TMI Issues:Whether the respondent-assessee rightly took Cenvat credit on various items used in the assembly of a new Refrigeration and Air-Conditioning system in their plant.Analysis:The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner of Central Excise & Customs (Appeals), Ghaziabad. The issue revolved around the eligibility of the respondent-assessee, engaged in the manufacturing of Colour Picture Tubes, to claim Cenvat credit on items like Vapor Absorption heat pump, Chilled Water Coil, Aluminum Sheets, Cold Insulation, Moisture Separator Cooling Tower, Pump, Air handling unit, etc., used in the assembly of a new Refrigeration and Air-Conditioning system in their plant. A Show Cause Notice was issued, alleging that the assessee wrongly availed Cenvat credit as the goods were used in the Air Conditioning system, which was deemed non-excisable. The Revenue contended that the goods did not fall under excisable goods as per the Central Excise Act and related rules.Upon hearing the parties and examining the contentions, the Tribunal found that the goods in question fell under specific chapters of the Central Excise Tariff Act, making them eligible for Cenvat credit. The Tribunal referred to the definition of capital goods under the Central Excise Rules and the Cenvat Credit Rules to support the assessee's claim. It was noted that the Aluminum sheets, as part of the capital goods, were essential for the installation of the air conditioning plant, which was necessary for manufacturing dutiable final products. The Tribunal further emphasized that the goods used for the air conditioning plant met the criteria of inputs used in or in relation to the manufacture of dutiable final products, as per the Cenvat Credit Rules. The Tribunal dismissed the appeal filed by the Revenue, stating that the grounds of appeal were not tenable and no error was found in the impugned order passed by the Commissioner.The Tribunal appreciated the assistance provided by the Amicus-curiae in disposing of the appeal and directed that a copy of the order be given to the learned Amicus-curiae. The respondent was declared entitled to consequential benefits in accordance with the law.