Order Date – 09 February 2023

Parties: Eimco Elecon India Limited Vs Commissioner of Central Excise & ST, Vadodara-i

Facts –

• The Appellant, Eimco Elecon India Limited, have 2 units and carrying out part of process in Unit-2 on the machinery installed therein and after the entire process is done, Unit-1 is clearing the final products on payment of duty.
• The appellant has availed Cenvat credit in respect of some spares and accessories of laser cutting machines which were used in Unit-2 which was denied on the ground that since the spares and accessories were used in Unit-2, Cenvat credit thereof shall not be admissible to appellants i.e. Unit-1.

Issue –

• Whether the appellant is entitled to Cenvat credit on spares and accessories of laser cutting machines which were used in Unit-2?

Order –

• The Tribunal held that the excisable goods are manufactured and cleared from the appellant’s Unit-1, therefore, it is undisputed that the spares and accessories were used in or in relation to the manufacture of excisable goods of the appellant.
• The similar issue has been decided in the appellant’s own case in respect of capital goods vide Final order dated 02.01.2019 wherein it was held that it is apparent that the essential condition for availment of credit as interpreted by various courts is that the capital goods should be used in or in relation to manufacture of the final product and even if the same are used outside the factory for the said purpose the credit cannot be denied so long as the said capital goods are not alienated by the appellant.
• Accordingly, the impugned order is set-aside and the appeal is allowed.