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CX - No justification to deny CENVAT credit on capital goods merely because they are installed in sister Unit: CESTAT

 

By TIOL News Service

AHMEDABAD, JUNE 26, 2018: THE assessee installed boiler and parts thereof in Unit II but availed CENVAT credit in their Unit no. I. The electricity generated in Unit II was exclusively used in their Unit I.

Holding the credit taken in Unit I as inadmissible, the demand was confirmed with penalty and interest.

Having failed before the Commissioner(A), the appellant is before the CESTAT and informs that subsequent to the demand notice, on application made by them, they received centralized registration for both the units on 26th April 2013.

Inasmuch as since whatever electricity generated in their Unit II had been captively consumed in their Unit I, credit was rightly taken on the capital goods viz. boiler and parts.

The appellant relied on the decision in OPG Metals Pvt. Ltd. - 2016-TIOL-1842-CESTAT-MAD wherein in similar facts and circumstances the credit was allowed.

The CESTAT extracted the cited decision and by following the same, set aside the impugned order and allowed the appeals.

(See 2018-TIOL-1949-CESTAT-AHM)


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