2018 (2) TMI 6 – CESTAT MUMBAI – TMI – CENVAT credit – capital goods/inputs – Diesel Locomotive used for conveyance of the raw materials and finished goods within the factory premises – Held that: – the appellants have availed the CENVAT Credit on diesel locomotive, which is admittedly used for handling of raw material/finished goods in the factory of the appellant – there is no dispute that the said goods is used in or in relation to the manufacture of the final product. Therefore, it qualifies as an input and credit is admissible – appeal allowed. – E/87335 & 87337/17 – A/92117-92118/2017 – Dated:- 21-12-2017 – Shri Ramesh Nair, Member ( Judicial ) Shri Rajesh Ostwal, Advcoate for Appellant Shri A.B. Kulgod, Asstt. Commissioner (AR) for Respondent ORDER Per : Ramesh Nair The appellants have availed CENVAT Credit on Diesel Locomotive under capital goods as the same is used for conveyance of the raw materials and finished goods within the factory premises. The adjudicating authority d
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t Ltd. VS. CCE – 2017 (339) ELT 127 (Tri-Hyd). 3. Shri A.B. Kulgod, learned Asstt. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. On careful consideration of the submissions made by both sides, I find that the appellants have availed the CENVAT Credit on diesel locomotive, which is admittedly used for handling of raw material/finished goods in the factory of the appellant. As per chapter heading 86 of the Diesel Locomotive, it is not covered under the capital goods. But, there is no dispute that the said goods is used in or in relation to the manufacture of the final product. Therefore, it qualifies as an input and credit is admissible. The very same issue of admissibility of CENVAT Credit on diesel locomotive has been considered by this Tribunal in the case of Bhushan Steel (supra), wherein the Tribunal has passed the following order: – 5.1 We have carefully considered the submissions and perused the record. The ld. Commissioner
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(51) E.L.T. 173 (S.C.)]. In both these judgments it has been held that an accessory adds to the convenience or effectiveness of something else. This test was followed in Banco Products (India) Ltd. (supra) while holding that plastic crates are accessories. Here too, I find that the diesel locomotive increases the convenience of carrying molten metal from one place to another. The torpedo ladle car containing molten iron could have been manually handled from one place to another. But its effectiveness in carrying the molten iron without melting can be enhanced by use of diesel locomotive. Thus the diesel locomotive is no doubt an accessory to the various machines used in the factory. In view of this, I hold that diesel locomotive is an accessory to goods falling under chapter 84, such as blast furnace, conarc furnace and pig casting machine and is thus capital goods. The appellant had correctly availed the Cenvat credit of the duty paid on diesel locomotive. 8. The appellant have also
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ally handled from one place to another. But its effectiveness in carrying the molten iron without melting can be enhanced by use of diesel locomotive, is concerned we find that though ld. Commissioner (Appeals) has observed that the molten iron could have been manually handled, ultimately, he agreed that the effectiveness in carrying the molten iron can be enhanced by the use of Diesel Locomotive. However, he failed to appreciate that once it is a question of handling 300 to 350 molten metal, it is not easy to handle it manually, if not impossible in normal situations. We, thus, record the concern of the appellant, in this regard. Further if we look at this issue beyond the general perception that the locomotive engines are used usually for pulling the passenger/goods trains, we find that Diesel Locomotive torpedo ladle car carrying molten metal up to 300-350 MT not only enhances the effectiveness, but without it the handling, and in turn production of finished goods would not be possi
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of manufacture. In addition, the judgments relied by the appellant and stated supra have held that credit is admissible on Railway tracks/sleepers used within the factory for transportation of raw materials and finished goods. Following the ratio laid in these judgments, I hold that the appellant has established a case on merits and that credit is admissible on MBC sleepers. 7. The appellant has also argued on the issue of limitation. They had disclosed the availment of credit in the ER-1 returns. The show cause notice is issued basing on the judgment laid in Vandana Global Ltd. (supra). There is no case for revenue that the appellant has not disclosed the credit details in their accounts or in ER-1 returns. They believed that credit is admissible and maintained proper statutory records reflecting the details of credit. On such score, it cannot be alleged that the appellant has wilfully suppressed facts with intent to evade payment of duty. The Hon ble Apex Court in Uniworth Textiles
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