Lighting and equipment under Chapter 85 held capital goods under Rule 2(a); Chapter 94 items qualify as inputs post-01.04.2011

CESTAT allowed the appeal and set aside the impugned order, holding that lighting, equipment and fixtures under Chapter 85 qualify as capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 and are eligible for Cenvat credit. Items under Chapter 94, even if not accessories, fall within the post-01.04.2011 definition of inputs because they were used in the manufacturer's factory and thus are admissible. The appellant is entitled to Cenvat credit on goods under both Chapters 85 and 94.

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Issues involved: Whether the appellant is entitled to Cenvat Credit for lightings, equipments, and fixtures falling under Chapter 85 and 94.

Analysis:

1. Issue of Cenvat Credit Eligibility: The Lower Authority denied Cenvat Credit, stating that the items were not used in the manufacture of the final product, and Chapter 94 items were not covered under the definition of capital goods. The appellant argued that under the amended definition effective from 01.04.2011, inputs include all goods used in the factory by the manufacturer of the final product. The appellant contended that even if not covered under capital goods, Chapter 85 items are eligible. Regarding Chapter 94 fixtures, the appellant relied on the definition of capital goods, stating they are components and accessories. The appellant cited relevant judgments to support their claim.

2. Arguments and Findings: The Joint Commissioner representing the revenue reiterated the Lower Authority's findings. The Member (Judicial) carefully considered both parties' submissions and the records. It was found that Chapter 85 items were clearly covered under the definition of capital goods. As for Chapter 94 items, even if not considered accessories, they fell under the definition of inputs as per the relevant rules. The definition of inputs, effective from 01.04.2011, includes all goods used in the manufacturer's factory. Since all the goods in question were used in the factory of the manufacturer of the final product, they were deemed eligible for Cenvat Credit. The Member noted that the appellant's arguments were supported by directly applicable judgments, leading to the conclusion that the impugned order was unsustainable, and thus, the appeal was allowed.

3. Conclusion: The judgment ruled in favor of the appellant, allowing Cenvat Credit for goods falling under both Chapter 85 and Chapter 94. The decision was based on the interpretation of the relevant rules and definitions, emphasizing the usage of goods in the factory of the manufacturer as a key factor in determining eligibility for Cenvat Credit.

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