The Learned Commissioner vide Order dated 17.12.2013 holding that since the capital goods for R&D work cannot be treated having been used in or in relation to manufacture of the final product, has denied the Capital Goods Cenvat Credit amounting to Rs. 9,97,38,882/- confirmed its demand along with interest thereon under section 11AB and has imposed penalty of  equal amount on them under Rule 15(2) of Cenvat Credit Rules, 2004 read with section 11AC of Central Excise Act, 1944.  It is against this order of the Commissioner that these appeals have been filed.

Held:

The Hon’ble CESTAT, New Delhi Excise in Appeal No. E/51748 & 51749/2014 –Ex [DB] has held that the definition of capital goods in as given Rule 2(a) of Cenvat Credit Rules, 2004 covers the goods listed in this sub Rule, which have been used in the factory of manufacture of final product. Thus, for capital goods Cenvat Credit, their use in or in relation to manufacture of final product is not required and their use in the factory of manufacture for the any purpose whether in or in relation to manufacture or for any other purpose including R&D would be enough for permitting the Cenvat Credit. In view of this, the impugned order is not sustainable.

Therefore, the same was set aside and the appeals of the Appellant were allowed.