2026-VIL-808-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Eligibility of Cenvat credit on capital goods and inputs used for setting up a power plant - The appellant, a sugar mill manufacturer, availed Cenvat credit on capital goods and inputs used for setting up a power plant to generate electricity, some of which was used captively for the sugar mill operations and the rest was supplied to the electricity department - Department denied the Cenvat credit on the ground that the power plant was an exempted good and not an excisable good - Whether the appellant is eligible to avail Cenvat credit on the capital goods and inputs used for setting up the power plant - HELD - As per the definition of "capital goods" under the Cenvat Credit Rules, 2004, the goods on which credit has been taken fall within the categories listed and have been used in the factory of the appellant for manufacturing of the final products - The goods on which the credit has been taken fall within the categories of the goods listed in the definition of the capital goods and have been used for the manufacturing of final product. The fact that the capital goods are installed and become a fixed structure does not disentitle the manufacturer from availing Cenvat credit, as long as the goods satisfy the definition of "capital goods" under the Rules. The reliance by the department on the CBEC Circular and the Supreme Court decisions in Triveni Engineering and Quality Steel Tubes cases is misplaced as the issues in those cases were different from the present case – Further, the department failed to prove any positive act of suppression on the part of the appellant to invoke the extended period of limitation, and the imposition of penalty was also not warranted considering the appellant's bonafide belief and the complex interpretation of the legal provisions involved - The impugned order is set aside and the appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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