2007 (11) TMI 542 - AT - Central Excise

Summary

Issues involved: Denial of Cenvat credit on capital goods including Welding Electrodes, Shaft, Asbestos Packing/CAF Jointing Sheet, Plates/Shafts/Sections of Iron and Steel.

Welding Electrodes: The Tribunal upheld the denial of credit on Welding Electrodes based on previous rulings stating that manufacturers are not entitled to credit for welding electrodes as inputs or capital goods.

Shaft: The shaft, being a part of the main rollers and classified under Chapter 84 as a component of the machine, is considered eligible for Cenvat credit as capital goods. Denial of credit on shaft is set aside.

Asbestos Packing/CAF Jointing Sheet: Asbestos packing/compressed asbestos fibers used for preventing leakage in pipes are considered integral parts of sugar machinery and entitled to Cenvat credit as capital goods. Denial of credit on these items is set aside.

Plates/Sheets/Sections/Shafts-Iron: These items, used for making shades in the factory, are considered construction/fabrication material and not falling within the definition of components, accessories, or spares of capital goods. The denial of credit on these items is upheld based on their use for making structures rather than for repair and maintenance of machinery.

In conclusion, the credit on Asbestos and Shaft is allowed, while the denial of credit on Welding Electrodes and S.S. plates is upheld. The issue revolves around the admissibility of Cenvat credit on various goods and the interpretation of statutes, leading to the setting aside of the penalty imposition.