Case Law Details
Dhampur Sugar Mills Ltd Vs Commissioner, Central Excise (CESTAT Allahabad)
CESTAT Allahabad held that CENVAT Credit of materials used for fabrication work of machines which are capital goods is duly available in terms of rule 3 of the CENVAT Credit Rules, 2004.
Facts- The appellant manufactures V.P. sugar & molasses falling under Chapter Headings 1701 11 90 and 1703 10 00 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant availed CENVAT credit of duty paid on inputs and capital goods used in the manufacture of the final products under rule 3 of the CENVAT Credit Rules, 2004.
A show cause notice dated 19.10.2007 was issued to the appellant and Gautam Goel, Managing Director of the appellant mentioning therein that on scrutiny of the ER-1 returns and the records of the appellant submitted for the period October 2006 to March 2007, it appeared that the appellant had availed CENVAT credit of Rs. 1,44,37,976/- on items namely Plate (7208), M.S. Angles (7216), Shape & Section (7216), G.P. Sheet/Coils (7210), C.R. Coil/Sheet (7209), C.R. Strip (7211), M.S. Bar/Rod (7214), Paints/Primer (3208), Thinner (3814) and Polyester Resin (3907) by treating these items as ‘capital goods’. The appellant was, therefore, called upon to show cause as to why the CENVAT credit wrongly utilized should not be disallowed and recovered from the appellant with interest and penalty for the reason that the items were not capital goods.
Conclusion- It is, therefore, clear that the materials on which CENVAT credit had been taken had all been used for fabrication work of machines which are capital goods. In any view of the matter the show cause notices do not allege that the raw materials on which CENVAT credit had been taken had not been utilized for fabrication of ‘capital goods’.
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