SABIC INNOVATIVE PLASTICS INDIA PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX
LAWS(CE)-2015-7-19
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on July 22,2015

Sabic Innovative Plastics India Pvt. Ltd. Appellant
VERSUS
Commissioner Of Central Excise And Service Tax Respondents

JUDGEMENT

H.K.THAKUR - (1.)THIS appeal has been filed by the appellant against OIA No. PJ/593/VDR -I/2012 -13 Dated 20.03.2013 passed by commissioner (A), Vadodara under which OIO No. 01/Dem/JC/Div. iv/2012 dated 16.02.2012 passed by Adjudicating authority, has been upheld in toto.
(2.)The issue involved in the present appeal is whether appellant is entitled to avail Cenvat Credit on inputs and capital goods used exclusively for R & D and Quality Control Laboratory situated inside the factory premises. Shri Willingdon Christian (Advocate) appearing on behalf of the appellant submitted that appellant has taken Cenvat Credit on inputs and capital goods used in the R & D and quality control Laboratory which is situated inside the factory premises. That in this Lab appellant is manufacturing test batches of all grades of Poly carbonates, ABS, PBT falling under Chapter - 39 of the Central Excise Tariff Act 1985. That certain tests are carried out on Injection Moulding Machine and the tests are matched with the samples supplied by the customers. That resultant Samples manufactured and tested are sent to customers for approval and on approval regular batches are manufactured and supplied to the customers. Learned Advocate argued that as per the definition of capital goods under Rule 2(a) of Cenvat credit Rules 2004 (CCR) only requirement for entitlement to capital goods credit is receipt and use of capital goods in the factory either in or in relation to the manufacture of finished goods. That by an earlier OIA No. Commr (AJ/442/VDR/ -I/2011 dated 20/22.12.2011 first appellate authority allowed the credit on the same inputs and capital goods. Learned Advocate made the bench go through para 5.5 and 5.6 of the OIA dated 20.03.2013 to argue that first appellate authority has only denied credit on the grounds that capital goods and inputs are not used in the manufacture of finished excisable goods and has not given any cognizance to the earlier OIA dated 20/22.12.2011 passed by Commr. (A) on the same issue Appellant relied upon the following case Laws: -
(i) Tata Engineering and Locomotive Co. Ltd. vs. CCE Pune [ : 2010 (256) ELT 56 (Bom.)]

(ii) USV Ltd. vs. CCE Mumbai - [2006 (195) ELT 158 (Tri. -Mumbai)]

(iii) Sudarshan Chemicals Inds. Ltd. vs. CCE, Pune -II [2010 (262) ELT 974 (Tri. -Mumbai)]

(iv) CCE Meerut -II vs. India Glycols Ltd. [2006 (196) ELT 221 (Tri. -Del.)]

(3.)SHRI Govind Jha (AR) appearing on behalf of the Revenue defended the orders passed by the lower authorities and argued that R & D machinery for tests of Samples and inputs used in R & D Laboratory cannot be considered a use in the manufacture or in relation to manufacture of excisable goods. It was his case that the credit has been correctly denied by the first appellate authority and penalties have also been imposed appropriately.
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