CENVAT Credit on duty paid on mirror assembly

53 taxmann.com 424 (New Delhi-CESTAT)-Commissioner of Central Excise, Delhi-I vs. Hero Honda Motors Ltd. [2015]

 

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.