TaxTMI 
TaxTMI 
2015 (9) TMI 1159
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....itled to avail Cenvat Credit on inputs and capital goods used exclusively for R & D and Quality Control Laboratory situated inside the factory premises. 2. Shri. Willingdon Christian (Advocate) appearing on behalf of the appellant submitted that appellant has taken Cenvat Credit on inputs and capital goods used in the R&D and quality control Laboratory which is situated inside the factory premises. That in this Lab appellant is manufacturing test batches of all grades of Poly carbonates, ABS, PBT falling under Chapter - 39 of the Central Excise Tariff Act 1985. That certain tests are carried out on 'Injection Moulding Machine' and the tests are matched with the samples supplied by the customers. That resultant Samples manufactured ....
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....R&D Laboratory cannot be considered a use in the manufacture or in relation to manufacture of excisable goods. It was his case that the credit has been correctly denied by the first appellate authority and penalties have also been imposed appropriately. 4. Heard both sides and perused the case records. The issue involved in these proceedings is whether appellant is entitled to Cenvat Credit on Capital goods and inputs used in the R&D and quality Control Laboratory of the appellant situated in the factory premises. It is observed from the provisions of Rule - 2(a) (A) (1) of Cenvat Credit Rules 2004, that specified goods should only be used "in the factory of the manufacture of final products". The requirement in Rule - 2(a) (A) of CCR is n....
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....cords, the appellants are engaged in the manufacture of medicines falling under Chapter 30 of Schedule to Central Excise Tariff Act, 1985 and were availing the benefit of Modvat credit on the inputs as also on the capital goods used in the manufacture of the said goods. The appellant has a Molecular Medicines Research Laboratory (MMRL) within their licensed factory premises. During the period April to December, 1998, they imported/indigenously procured capital goods/equipments, which were installed in their Research Laboratory. They availed the benefit of Modvat credit of duty paid on the said capital goods in terms of the provisions of Rule 57Q. The revenue's objection to said availment of credit is on the ground that the capital goods....
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....Supreme Court was different when the definition of capital goods meant differently. However, the said definition underwent a change as already observed by us and the earlier requirement of the various capital goods being used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products was done away with and the only requirement was that the specified goods in the table annexed with Rule 57Q should be used in the factory of the manufacture of the final products. Admittedly, Research Laboratory being situated within the factory premises, disputed capital goods were used in the factory for manufacture of final products and thus would get covered by the definition of capital g....
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....or not the input is physically present in the final finished product as such, in our considered view, the laboratory test in relation to the manufacture of final product is a part of manufacture." 4.3 Similar view was expressed by CESTAT Mumbai in the case of Sudarshan Chemicals Inds. Ltd. vs. CCE pune-II (Supra) by passing following observation in para:- "9. After careful examination of the facts of the case, I find that the manufacturing activity of the appellant is as such that the input procured by the appellant is first to be tested and then they have to be taken into the manufacturing process. Moreover, if some variations found with regard to the quality of input, it is to be retested as per required composition. In that situation,....