Case Law Details

Case Name : Wimplast Limited Vs. Commissioner of Central Excise & ST
Appeal Number : [2014 (11) TMI 161 - CESTAT AHMEDABAD]
Date of Judgement/Order :
Related Assessment Year :

In the instant case, the First Appellate Authority denied the Cenvat credit on Capital Goods on only ground that Wimplast Limited (the Appellant) had purchased the Capital Goods on hire purchase or loan agreement form a Company which was not a financial Company as prescribed under Rule 4(3) of the Cenvat Credit Rules, 2004 (the Credit Rules), which reads as under:

“Rule 4: Conditions for allowing CENVAT credit


(3) The CENVAT credit in respect of the capital goods shall be allowed to a manufacturer even if the capital goods are acquired by him on lease, hire purchase or loan agreement, from a financing company.”

Being aggrieved, the Appellant preferred an appeal to the Hon’ble CESTAT, Ahmedabad.

The Appellant relied upon the decision inthe case of Leamak Healthcare Pvt. Ltd. [2010 (259) ELT 554 (Tri. Ahmd.)] (“Leamak case”), wherein it was held that the words used in Rule 4(3) of the Credit Rules are ‘even if the Capital Goods are acquired’ which does not debar Cenvat credit taken on the Capital Goodsacquired froma Company which is not a financing Company.

The Hon’ble CESTAT, Ahmedabad after considering the facts and circumstances of the case and relying upon the judgment inLeamak case, held that Rule 4(3) of the Credit Rules does not require procurement of the Capital Goods from financing Company but it is enabling and enlarging sub-rule allowing Cenvat credit even in those cases where the Capital Goods have been procured from a financing Company. Accordingly the Appellant is entitled to the benefit of Cenvat Credit.

 (Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email:

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October 2020