2007 (4) TMI 79 - AT - Central Excise

Cenvat/Modvat credit - Alleged that appellant is not entitle for credit on the ground that the plain sheets were used by the appellants in the machineries after cut to size - Held that allegation was not correct and accordingly allow the appeal

Summary

Issues:
Allowance of Cenvat credit on plain plates and angles used for maintenance and repair of machinery as capital goods.

Analysis:
The case involved a dispute regarding the allowance of Cenvat credit on plain plates and angles used for maintenance and repair of machinery as capital goods. The adjudicating authority initially allowed the credit, citing precedents like the Rosa Sugar Works case and the U.P. Sugar Corporation case. The Commissioner (Appeals), however, allowed the appeal of the Revenue, leading to the current appeal before the Appellate Tribunal CESTAT, NEW DELHI.

The appellant's advocate argued that the adjudicating authority's decision was in line with previous Tribunal decisions and Supreme Court rulings that upheld similar cases. He emphasized the relevance of the certificate of the Chief Engineer regarding the use of the materials and highlighted the definition of explanation 2 of the clause (f) of Rule 2 of Cenvat Credit Rules, 2001.

The authorized representative for the department reiterated the findings of the Commissioner (Appeals), stating that the plain plates were purchased in running length and cut to size for use in the machineries, thus not qualifying as components and accessories.

Upon review of the records and arguments from both sides, the Tribunal noted the findings of the adjudicating authority, which considered plain plates and angles used for maintenance and repair of machinery as eligible capital goods based on previous Tribunal decisions. The Tribunal also referenced a series of decisions where M.S. plates and angles used as components in machinery equipment were deemed eligible for Cenvat credit.

The impugned order by the Commissioner (Appeals) did not dispute the use of the capital goods as mentioned in the adjudication order. The denial of credit was based on the plain plates being in running length and shaped in the factory before use in the machineries. However, since the plain plates and angles were used in the machineries and were considered admissible for Cenvat credit in previous Tribunal decisions, the impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Appellate Tribunal CESTAT, NEW DELHI upheld the adjudication order, allowing Cenvat credit on plain plates and angles used for maintenance and repair of machinery as capital goods based on established precedents and the certificate of the Chief Engineer provided by the appellant.