TaxTMI 
TaxTMI 
2024 (10) TMI 1333
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.... for taking credit on inward transport of capital goods paid on Reverse Charge Mechanism (RCM). 2. The case, in brief, is that the Department noticed that the appellants have been engaged in the manufacture of Ethanol, Industrial Alcohol and Potable Alcohol as also Extra Neutral Alcohol and Rectified Spirit. They are also engaged in the manufacture of by product Fusel Oil and Carbon dioxide and availing Cenvat Credit of duty paid on capital goods as well as input services. The demand totaling of Rs. 2,41,93,278/- was issued on the grounds that certain capital goods have been used exclusively for the manufacture of exempted goods namely Extra Neutral Alcohol and Rectified Spirit. Keeping in view, the definition of the capital goods, the Dep....
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....of consumables. He has also held that these 2 items would be otherwise eligible for input credit/consumable. However, he has also considered that since these two items namely Araldite and Molecular Seives are in the nature of inputs/consumables on which they have taken credit and utilised the same in manufacture of both dutiable and exempted goods. Therefore, since the assessee had not chosen any option under Rule 6 of CCR 2004, the demand was worked out under Rule 6(3A) i.e. credit attributable to inputs used in exempted goods amounting to Rs. 1,33,312/-. He also held that they are liable for penalty under Rule 15(1) of the CCR, 2004 for irregularly availing the Cenvat Credit treating them as capital goods in contravention of the provision....
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....e issue is no longer res integra. The Molecular Seives has been treated as inputs and not as capital goods. Therefore, the Commissioner is correct in holding this item as consumable or input. 6. Heard both the sides and perused the records. 7. I find that the issue raised in the show cause notice dated 01.08.2011 is more or less settled by the Original Adjudicating Authority by dropping the demand of Rs. 2,40,59,966/- out of total demand of Rs. 2,41,93,278/-. He has only confirmed an amount of RS. 1,33,312/- on account of ineligible credit attributable to Molecular Seives and Araldite and Rs. 1,25,329/- attributable to GTA - Inward Transportation. As far as Molecular Seives are concerned, in view of the cited judgments of Co-ordinate Benc....
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....for coating the metal machinery which is essential to prevent rust formation and to prevent any rust contamination in the chemical processes and therefore, would be classifiable as accessory of the machinery in which they have been used and therefore he held Epoxide Resins rightly classifiable as capital goods and Cenvat Credit was found to be eligible. From the discussions given for Epoxide Resins, I find that because of their mechanical properties and resistance to chemical and suitability for prevention of formation of rust, levelling etc., they are used in fermentation tanks on the interior and exterior surfaces providing a barrier against corrosive substances. Therefore, once the Adjudicating Authority has held Epoxide Resin as capital....