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of <h1>Tribunal allows Cenvat credit on V belts and pulleys, emphasizing duty payment on final products</h1> <h3>M/s. Elgi Ultra Industries Ltd. Versus Commissioner of GST & Central Excise, Coimbatore</h3> M/s. Elgi Ultra Industries Ltd. Versus Commissioner of GST & Central Excise, Coimbatore - TMI Issues:Cenvat credit availed on imported V belts and locally procured pulleys, Classification of goods as inputs, Contravention of Cenvat Credit Rules, Show cause notice validity, Dispute over availment of credit, Double taxation allegation, Applicability of previous tribunal and high court decisions, Departmental findings challenged.Analysis:The case involved a dispute over the appellant's availing of Cenvat credit on imported V belts and locally procured pulleys, which were considered finished goods by the Revenue, leading to a show cause notice being issued. The Revenue contended that as the goods were finished products, they did not qualify as inputs under Rule 2(k) of the Cenvat Credit Rules, alleging contravention of the rules due to the trading activity instead of manufacturing. The appellant argued that they had paid duty on the final products, belts, and pulleys, and should not be denied credit, highlighting the risk of double taxation.The Commissioner (Appeals) rejected the appellant's contention, leading to the appeal. The appellant's counsel referenced previous decisions, including Ruchi Soya Industries Ltd. and CCE Vs Vishal Precision Steel Tubes and Strips Pvt. Ltd., to support their argument that the credit availed should be allowed. The department reiterated its findings, but the Tribunal noted that the appellant had paid duty on the final products, belts, and pulleys, which should prevent disallowance of credit according to the Hon'ble High Court of Bombay's decision in CCE Pune Vs Ajinkya Enterprises.The Tribunal, after considering the facts and legal precedents, concluded that the demand for disallowing the credit could not be sustained. Citing the decisions in previous cases, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as per the law. The judgment emphasized the importance of duty payment on final products in determining the eligibility for availing credit on inputs, ultimately ruling in favor of the appellant based on established legal principles and precedents.
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