2017 (3) TMI 171 - AT - Central Excise

Goods for Cooling Rooms Not Capital Goods for Cenvat Credit

The Tribunal held that goods falling under Chapter Heading 7610, used for making cooling rooms, did not qualify as capital goods for Cenvat Credit. ... CENVAT credit - Aluminium Sheets, Flush Partition, Flush Door, Ceiling etc. - denial on the ground that all the goods on which credit was taken are falling under heading 7610 whereas credit is allowed on the capital goods of Chapter Heading No. 82,84, 85 and 90 - Held that: - since the goods in question does not qualify either as input or capital goods the cenvat credit is not admissible - the goods falling under Chapter 7610 is not covered under the definition of Capital goods. Even the goods of chapter heading 7610 was not used for manufacture of any component or part of any machine prescribed under the definition of capital goods - credit rightly denied - appeal dismissed - decided against assessee. Issues:1. Disallowance of Cenvat Credit on Capital Goods falling under Chapter Heading 7610.2. Interpretation of the definition of capital goods.3. Admissibility of Cenvat Credit based on usage of goods.Analysis:Issue 1: The appellant availed Cenvat Credit on goods falling under Chapter Heading 7610. The adjudicating authority disallowed the credit, stating that these goods do not qualify as capital goods. The Commissioner (Appeals) upheld this decision, leading to the appeal.Issue 2: The appellant argued that the goods, including Aluminium Sheets, were used in the cooling system necessary for a pharmaceutical unit, making them eligible for credit. The appellant cited relevant judgments to support their claim, emphasizing the necessity of the goods for the manufacturing process.Issue 3: The Revenue, represented by the Assistant Commissioner, supported the disallowance of credit based on previous judgments. The Tribunal analyzed the usage of the goods and the definition of capital goods. It was found that the goods in question, although essential for maintaining temperature in the manufacturing area, did not qualify as capital goods under the defined criteria.The Tribunal concluded that the goods falling under Chapter Heading 7610, used for making cooling rooms, did not meet the definition of capital goods. While acknowledging the necessity of such rooms for temperature control, the goods were not considered eligible for Cenvat Credit. Distinctions were drawn from cited judgments where goods were used for specific purposes that aligned with the definition of capital goods. Consequently, the appeal was dismissed, upholding the decision to disallow the credit.