2014 (2) TMI 1055 - AT - Central Excise

Tribunal rules in favor of appellant, allowing credit for essential radio active material in lab analyzer

The Tribunal rejected the Revenue's appeal regarding the eligibility of radio active material (californium - 252) used in a fast lab analyzer as capital ... Availment of CENVAT Credit - Whether the radio active material (californlum - 252) used in fast lab analyzer is a eligible capital goods or not - Held that:- appellants had pleaded before the adjudicating authority that the item in question is a component of Fastlab Analyzer, and in fact without this component the said analyzer cannot function at all. The appellants had also submitted the brochure of the Fastlab Analyzer, published by the manufacturer, which clearly shows the impugned item, namely “One to three Cf252 neutron sources” as a component of the Fastlab Analyzer, and in the sketch the location of the same has also been indicated very clearly. The adjudicating authority has not contradicted above submissions of the appellants in the impugned order. Therefore, Without going into the dispute as to whether the said item can be considered as capital goods, same would be in any case covered by the inputs definition and would be admissible for the credit - Decided against Revenue. Issues:1. Eligibility of radio active material (californlum - 252) used in fast lab analyzer as capital goods.The dispute in the present appeal revolves around the eligibility of radio active material (californlum - 252) used in a fast lab analyzer as capital goods. The Commissioner (Appeals) had allowed the credit claimed by the appellant, stating that the radio active material is a component of the Fastlab Analyzer and without it, the analyzer cannot function. The Commissioner noted that being consumed in due course does not disqualify an item from being a component of certain capital goods. The appellant had also submitted the manufacturer's brochure, which clearly identified the radio active material as a component of the analyzer. The adjudicating authority did not refute these submissions. The Commissioner further highlighted a previous order where the credit for the radio active material was held to be admissible. The Tribunal, without delving into the capital goods aspect, emphasized that the item falls under the definition of inputs and is eligible for credit. Consequently, the Tribunal rejected the Revenue's appeal, finding no merit in it.In conclusion, the judgment delves into the intricate details surrounding the eligibility of radio active material (californlum - 252) used in a fast lab analyzer as capital goods. It underscores the importance of the material as a component crucial for the functioning of the analyzer, as evidenced by the manufacturer's brochure. The Tribunal's decision to reject the Revenue's appeal was based on the understanding that the material falls within the definition of inputs and is, therefore, admissible for credit. The judgment showcases a meticulous analysis of the facts and legal provisions to arrive at a reasoned conclusion in favor of the appellant.