Case Law Details
Items used in the manufacture of capital goods and parts thereof and are eligible for CENVAT credit under Rule 2 of the CENVAT Credit Rules, 2002.
CCE Vs. Rashtriya Ispat Nigam Ltd. (AP High Court)- ‘Capital goods’ would not only include goods falling under Chapters 82, 84, 85 and 90 of the Central Excise Tariff Act but also components, spares and accessories of such goods, and moulds and dies which are used in the factory of the manufacturer of the final product, but not equipment or appliance used in an office.
It is not even the case of the Revenue that the goods, for which CENVAT credit was claimed, are equipment or appliances used in the office. It is their case that it is only if the goods are used in the manufacture of the final product, or are goods other than those used for repairs of capital goods, would they fall within the definition of “capital goods” under Rule 2(b) of the CENVAT Credit Rules. The distinction between manufacturer of the final product, and the manufacture of the final product, must not be lost sight of. It is only goods mentioned in clauses (i) to (iii) of Rule 2(b), and which are used in the manufacturer’s factory, which fall within the ambit of “capital goods”. The goods in question are, admittedly, used in the repairs of capital goods in the factory of the manufacturer and, as such, fall within the ambit of Section 2(b)(ii) of the CENVAT Credit Rules.
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major heading of capital goods have credit taken 50%