2007 (9) TMI 66

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....t in the factory premises. (PFAD is also removed as such). In the Acid Oil plant they are processed into Acid Oil which is cleared on payment of duty. RHF availed Modvat/Cenvat credit on capital goods received for setting up the refinery and other manufacturing facilities in the factory during the material period. On a tentative finding that RHF was not entitled to avail credit of duty paid on capital goods installed in the refinery for clearing Acid Oil manufactured in a separate plant, department initiated proceedings by issuing a Show Cause Notice dated 22-3-2005. Department had also felt that RHF was not entitled to credit of duty paid on computers, paint and welding electrodes. Computers were installed in the office of the assessee's f....

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....of the factory of the assessee approved by the jurisdictional Superintendent. It covered the refinery and other facilities including the Acid Oil plant. As per statutory definition, capital goods are those used in the factory of the manufacturer. Therefore the impugned goods were capital goods envisaged in the Modvat/Cenvat rules and yielded credit. The Rule 57T declarations whenever filed by the assessee had shown Acid Oil as the final product. RHF vide its letter dated 27-12-2000, had intimated the jurisdictional Assistant Commissioner, its intention to utilize the capital goods credit for payment of duty on Acid Oil. They had explained that Acid Oil plant was part of the factory just as the refinery and that they were eligible to avail c....

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....ncorrect and was not to be taken serious note of. Moreover, factory was not defined in the rules for the purposes of Modvat/Cenvat. As the impugned goods were installed in the refinery and no dutiable goods emerged in the refinery, RHF was not entitled to the credit demanded. He defended the impugned order as legal and correct. 5. We have carefully studied the rival submissions. The main dispute to be decided in this case is whether RHF was lawfully entitled to take credit of duty paid on capital goods in view of the provisions defining capital goods in the rules during various periods in the material period. As per these  provisions, capital goods are defined as those which are used in the factory of the assessee. We have no doubt ....