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of <h1>CESTAT upholds appeal for CENVAT credit on Coated Pipes in gas pipeline</h1> <h3>M/s Bell Ceramics Ltd. Versus C.C.E. & S.T. -Vadodara-II</h3> The appellant's appeal against the disallowance of CENVAT credit for duty paid Coated Pipes used in a gas pipeline was upheld by CESTAT Ahmedabad. The ... Denial of CENVAT Credit - Credit on Coated Pipes (capital goods) used as replacements in a pipeline used for transportation of natural gas from Gail s take off point to Appellant s factory for the manufacture of finished goods - Held that:- From the case law relied upon by the first appellate authority and the Learned Advocate during the course of hearing, it is observed that there were divergent views expressed on the issue. However, CESTAT Ahmedabad in the case of Torrent Pharmaceuticals Ltd. vs Commissioner of Central Excise & Service Tax, Ahmedabad-III (2014 (8) TMI 87 - CESTAT AHMEDABAD) vide order dated 04.07.2014 held the credit of pipes from bringing water from a far of source to the factory for use in or relation to the manufacture of finished excisable goods as admissible. - Decision in the case of Birla Corporation Ltd vs Commissioner of Central Excise [2005 (7) TMI 104 - SUPREME COURT OF INDIA] followed - Decided in favor of assessee. Issues:Disallowed CENVAT credit for duty paid Coated Pipes used in gas pipeline transportation.Analysis:The appellant filed an appeal against the disallowance of CENVAT credit for duty paid Coated Pipes used in a gas pipeline for transporting natural gas. The first appellate authority rejected the claim citing that the pipes were not used in the factory of manufacture as required under CENVAT Credit Rule 2004. The appellant's counsel argued, referencing case laws, that similar credits for pipes used in transporting water to a factory have been allowed in previous judgments. The Revenue contended that inputs/capital goods must be used only in the factory of manufacture to be eligible for CENVAT credit. The issue revolved around the use of pipes in the gas pipeline manufacturing process. Divergent views were noted, but the CESTAT Ahmedabad, in a precedent case, allowed credit for pipes used to bring water to a factory for manufacturing finished goods. The bench relied on the Apex Court's decision in a related case to support their ruling. The appellant's counsel highlighted that several Tribunal decisions followed the principles laid down in previous cases, establishing a settled legal position. The bench emphasized consistency in applying legal principles to avoid confusion and upheld the appellant's appeal, setting aside the impugned orders and allowing the CENVAT credit.This judgment clarifies the eligibility criteria for CENVAT credit concerning the use of capital goods in manufacturing processes. It underscores the importance of consistency in legal interpretation and application to maintain clarity and avoid legal ambiguities. The reliance on previous case laws and the Apex Court's decision strengthens the legal basis for allowing the CENVAT credit in this case. The judgment highlights the significance of adhering to established legal principles and precedents to ensure fair treatment for taxpayers and maintain legal certainty in tax matters.
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