Tribunal allows appeal on Cenvat credit for Tipper Trucks, emphasizing their role in material handling.

The Tribunal allowed the appeal in favor of the appellant, setting aside the Commissioner's order demanding recovery of Cenvat credit on 'Tipper Trucks'. The Tribunal held that the trucks qualified as material handling equipment eligible for credit under the Cenvat Credit Rules. It rejected the Revenue's argument of lack of information on credit availment, emphasizing the trucks' essential role in material movement for manufacturing. The appellant's reduced liability of Rs. 1,69,409/- was upheld, with the judgment pronounced on 22.05.2018 by Shri P. K. Choudhary, Judicial Member of the Appellate Tribunal CESTAT Kolkata.

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Issues:
Appeal against Order-in-Original regarding irregular utilization of Cenvat credit on 'Tipper Trucks' under Central Excise Tariff Act, 1985.

Analysis:
The appellant, engaged in sponge iron manufacturing, availed Cenvat credit on 'Tipper Trucks' under chapter subheading 87042319. A show cause notice alleged irregular utilization of Cenvat credit amounting to Rs. 5,31,169/-, contravening Cenvat Credit Rules, 2004. The Commissioner (Appeals) reduced the demand to Rs. 1,69,409/-, to be recovered with interest and penalty, which the appellant appealed before the Tribunal.

The appellant's consultant argued that the trucks were used exclusively within the factory for material handling. He cited precedents to support admissibility of credit on material handling machinery. The Revenue contended that the trucks did not qualify as 'input' under Rule 2(k) of the Cenvat Credit Rules. They also claimed lack of information from the appellant regarding credit availment.

Referring to a precedent, the Tribunal found that material handling equipment, like the trucks in question, was eligible for Cenvat credit. The Tribunal rejected the Revenue's claim of unawareness about credit availment, noting multiple audits and regular monthly returns filed by the appellant. The Tribunal emphasized the vital role of trucks in material movement within the factory for manufacturing the final product.

Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment was pronounced on 22.05.2018 by Shri P. K. Choudhary, Judicial Member of the Appellate Tribunal CESTAT Kolkata.

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