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of <h1>Tribunal affirms eligibility of cenvat credit on disputed goods, stresses compliance with rules</h1> <h3>CCE, Jaipur-II Versus M/s. Modern Insulators</h3> CCE, Jaipur-II Versus M/s. Modern Insulators - TMI Issues:1. Eligibility of cenvat credit on disputed goods.2. Classification of disputed goods as capital goods/inputs.3. Reliability of verification report.4. Interpretation of cenvat credit rules.5. Dismissal of appeal by the Revenue.Analysis:The judgment revolves around the eligibility of cenvat credit on disputed goods, contested by the Revenue in an appeal against the Commissioner (Appeals) order. The Commissioner had allowed the cenvat credit based on a detailed verification report from the Central Excise Range Office. The Revenue argued that the disputed goods, used in a factory, do not qualify as capital goods/inputs under the Sale of Goods Act, 1930. The ld. DR for the appellant contended that the nature of use of the goods does not warrant cenvat benefit.On the other hand, the ld. Advocate for the respondent highlighted that the denial of cenvat credit was based on a statement from 2007, whereas the disputed goods were used in the factory during a later period. The Advocate emphasized the verification report from 2013, which confirmed the actual use of the goods, leading to the Commissioner's decision in favor of the respondent.The Tribunal, after hearing both sides, analyzed the situation. It noted that the Commissioner had relied on the 2013 verification report to allow the cenvat benefit to the respondent. The Tribunal disagreed with the Revenue's argument that the heavy machines in the factory, where the disputed goods were used, should not be considered goods for cenvat credit purposes. It emphasized that the cenvat credit rules permit manufacturers to claim credit on inputs used in manufacturing the final product within the factory. The Tribunal found no merit in the Revenue's claim that the disputed goods did not qualify as capital goods/inputs, as confirmed by the verification report. Consequently, the Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal.In conclusion, the Tribunal's judgment focused on upholding the eligibility of cenvat credit on the disputed goods, emphasizing compliance with the cenvat credit rules and the significance of the verification report in determining the nature of the goods. The dismissal of the Revenue's appeal reaffirmed the Commissioner's decision in favor of the respondent.
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