By Puloma Dalal, Jayesh Gogri, Mandar telang Chartered Accountants
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CENVAT Credit on duty paid on mirror assembly, sari guard and tool kit used in manufacture of motorcycle are parts of motorcycle is allowed as these products are cleared along with the motorcycle.
Facts:
Assessee, a manufacturer of motor cycles, took CENVAT Credit of mirror assembly, sari guard and tool kit treating them as ‘inputs’. The Commissioner allowed the CENVAT Credit. The revenue filed the appeal on the ground that the said items are not used in or in relation to the manufacture of the motor cycle and therefore are not eligible to be called inputs as per the law prevailing prior to 01/03/2011.
Held:
Tribunal observed that, it is not disputed that all three impugned items are cleared along with the motor cycle and the value thereof is included in the assessable value of the motor cycle. The Tribunal relied upon the decision in the case of CCE vs. Honda Motorcycle & Scooter India (P.) Ltd. 2014 (303) ELT 193 (P&H) wherein it was held that the final product cannot be given restricted meaning so as to mean as the engine of the vehicle or the chassis but all things which are necessary to make the final product marketable. Thus, for motor vehicle, the tool kit and the first aid kit has to be part of the vehicle before the same can be put to use. Applying the said ratio in respect of sari guard and rear view mirror assembly, the Tribunal dismissed Revenue’s appeal.
