2019 (6) TMI 677 - AT - Central Excise

Tribunal: Cenvat Credit Eligibility Clarified

M/s Yash Gases Pvt. Ltd. Versus C.C.E. & S.T., - Bhavnagar

M/s Yash Gases Pvt. Ltd. Versus C.C.E. & S.T., - Bhavnagar - TMI Issues: Eligibility of Cenvat credit on steel gas cylinder and castor oil.Analysis:1. Steel Gas Cylinder: The appellant, engaged in manufacturing oxygen gas, availed Cenvat credit on steel gas cylinders used for storing and transporting gas. The department contended that since the cylinders were used for transportation, credit was inadmissible. The appellant argued that the cylinders were also used for storage during manufacturing. The Tribunal held that the cylinders were used for storage during manufacturing and transportation, making them eligible for credit. Citing precedent cases, the Tribunal supported the admissibility of Cenvat credit on steel gas cylinders as capital goods.2. Castor Oil (Lubricating Oil): The appellant also availed Cenvat credit on castor oil, used as input in the manufacturing process. The Revenue denied credit during the exemption period under SSI exemption, claiming it was not used in manufacturing. The appellant argued that castor oil, considered a capital good at the time, was used for lubrication of plant and machinery. The Tribunal found the credit admissible, stating that even during the exemption period, the credit was utilized when excise duty was paid, and the oil was used for plant maintenance. The Tribunal allowed the Cenvat credit on castor oil.3. Other Items: The appellant reversed Cenvat credit on Cement Sheet, MS Beams, and Nitrogen Gas, not contesting the demand related to these items. The Tribunal confirmed the demand and penalties on these items. The appeal was allowed for steel gas cylinders and castor oil, setting aside the demand for these items.