AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (1) TMI 29
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.... these goods qualify to be input within the meaning of term as defined in Rule 2(k) of Cenvat Credit Rules, 2004. Revenue was of the view that tyres cannot be considered as input for the manufacture of zinc. They also point out that LDPT is a capital asset. This equipment falls under Chapter 87 of Central Excise Tariff. This item is not included in the definition of "capital goods" in Cenvat Credit Rules, 2004 and hence no credit can be availed on the tyres which are spares for such equipment. For such reasons, Revenue initiated proceedings for recovery of cenvat credit taken. The show cause notices issued in this regard have been adjudicated confirming a demands of Rs. 3,12,266/- and Rs.83022/- along with interest and penalties in two diff....
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.... LPDT will not disqualify the item to be an input. For his arguments, he relies on the decision of the Kolkatta High Court in the case of Singh Alloys & Steel Vs CCE 1993 (66) ELT 594 (Trib). He points out that this decision is for the period when cenvat credit was not available on plant and machinery. The High Court held that consumable like ramming mass, magnosite peas, doatch mix etc were eligible for credit as input. His argument is that today the difference is only that on many of the capital assets cenvat credit is allowed and on a few credit is not allowed. During the time relevant for this case, cenvat credit was not available to a few items like LPDT. He argues that the legal position that cenvat credit should be allowed on parts o....
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....n respect of inputs which are used in the manufacture of capital goods as defined under Rule (2a). It is his contention that since LPDT is outside the definition of "capital goods", cenvat credit cannot be allowed on parts of LPDT. It is his argument that no cenvat credit should be allowed on parts of an equipment which is specifically excluded from the scheme of cenvat credit. 6. I have considered arguments of both sides. It is recognized by judicial decisions that captive mines have to be considered as part of the factory only. 7. The definition of "capital goods" at Rule 2 (a) of Cenvat Credit Rules, 2004 reads as under: "(a) "capital goods" means :- (A) the following good....
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....use (105) of section 65 of the Finance Act;" 8. The above definition does not cover LDPT which falls under chapter 87 of the Central Excise Tariff used by the appellant who is a manufacturer of excisable goods. So it is fairly clear that LDPT cannot be treated as "capital goods". 9. The next issue is whether LDPT can be considered as an "input" within the definition at Rule 2 (k). This definition covers goods "used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not". There is nothing specifically stated in the rule to exclude equipment or plant or machinery. But by implication what is included in Rule 2(a) is excluded from Rule 2 (k). Since chapter 87 is ....
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....4 and is absent in the present Cenvat Credit Rules, 2004. The present argument of Revenue relies mainly on common understanding of the expressions "inputs" and "capital goods" and historical evolution of the definitions for these expressions for allowing Cenvat credit. The Tribunal in the case of Aditya Cement Vs. CCE Jaipur-II-2009 (245) E.L.T. 266 (Tri.-Del) has held that goods which are accounted as capital assets cannot be considered as inputs. There is no reason to differ from this view. 12. So I accept the argument of Revenue that LDPT is neither covered by definition of "capital goods" or "inputs" in Cenvat Credit Rules, 2004. But that is not the issue in dispute before me. 13. The issue before me is whether tyres which are used as....