Cenvat credit on inputs used for capital goods manufacturing cannot be denied when that use is admitted and uncontroverted.

Cenvat credit on inputs used in manufacturing capital goods under Chapter 72 was held admissible where the assessee specifically explained that use in reply to the show cause notice and the record showed that explanation was not controverted. On those admitted facts, denial of credit was not justified on a mere assumption of wrong availment. The order allowing credit was upheld and the Revenue's challenge failed.

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Issues: Whether Cenvat credit on inputs was admissible when the inputs were used for manufacturing capital goods falling under Chapter 72 of the Central Excise Tariff Act, 1985.

Analysis: The inputs were found to have been used in the manufacture of capital goods, and that fact had been specifically explained in the reply to the show cause notice. The record showed that this explanation was not controverted. Once the use of the inputs for manufacturing capital goods was admitted on the facts, denial of input credit was not justified.

Conclusion: Cenvat credit on the inputs was admissible, and the Revenue's challenge failed.

Final Conclusion: The order allowing credit was upheld, and the Revenue's appeal was rejected.

Ratio Decidendi: Where the use of inputs for manufacturing capital goods is admitted and remains uncontroverted, Cenvat credit cannot be denied on a mere assumption of wrong availment.

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