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of <h1>Appeal Granted: Actual Usage Determines CENVAT Credit Eligibility</h1> <h3>M/s Gelnova Laboratories (I) Pvt. Ltd. Versus Commissioner of Central Excise, Belapur</h3> M/s Gelnova Laboratories (I) Pvt. Ltd. Versus Commissioner of Central Excise, Belapur - TMI Issues:Rejection of CENVAT credit on the ground of misclassification by the supplier.Analysis:The case involved the appellant challenging the denial of CENVAT credit by the authorities based on the supplier's classification of goods as 'steel furniture' under Chapter Heading 94032010, which was different from the appellant's claim that the items were components of machinery falling under Chapter 84798970. The appellant argued that the actual usage of the goods should determine eligibility for CENVAT credit, citing judicial precedents like the Daya Sugar case. The appellant contended that despite the incorrect classification by the supplier in the invoice, the actual description of the goods in the body of the invoice supported their claim for CENVAT credit.On the other hand, the respondent, represented by the Authorized Representative, relied on various case laws to support the decision of the Commissioner (Appeals) in denying the CENVAT credit. The respondent emphasized the importance of accepting the supplier's declared classification by the Central Excise Officer and argued against interference in the decision. However, the appellant distinguished the Sarveshwar Refractories case and argued that the actual usage of goods should prevail over the supplier's classification, as established in the Daya Sugar and Shree Cement cases. The appellant highlighted the importance of judicial discipline in following precedents for consistency in the law.Ultimately, the Member (Judicial) allowed the appeal, setting aside the order of the Commissioner of Central Tax, Central Excise & Service Tax (Appeals), Raigarh dated 12.09.2018. The decision was based on the principle that the actual usage of goods should determine eligibility for CENVAT credit, following the judicial discipline set by previous cases like Daya Sugar and Shree Cement. The judgment emphasized the importance of considering the actual nature and usage of goods over the supplier's classification for determining CENVAT credit eligibility.
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