2015 (5) TMI 1149 - AT - Central Excise

CENVAT credit - input - MS Plates, MS Joists, MS Channels etc - Held that - the judgment of Hon ble Rajasthan High Court in the case of Hindustan Zinc Ltd. 2006 (5) TMI 44 - HIGH COURT RAJASTHAN is to be followed in the instant case, since this Tribunal falls under the jurisdiction of the said court, where Court decided that which is used for production of final product eligible for modvat credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved: Eligibility of cenvat credit on MS Plates, MS Joists, MS Channels; Definition of 'Input' under Rule 2(k) of the Cenvat Credit Rules, 2004.

Analysis:

1. Eligibility of Cenvat Credit: The issue in the present appeal revolved around the eligibility of cenvat credit on certain goods like MS Plates, MS Joists, and MS Channels. The Authorities had denied the credit, stating that these goods did not meet the definition of 'Input' as per Rule 2(k) of the Cenvat Credit Rules, 2004.

2. Appellant's Submissions: The appellant's advocate argued that the disputed goods were used for repair and maintenance of capital goods within the factory premises, such as Ball Mill and Floatation Cell Plant. The advocate cited judgments from various High Courts and the Supreme Court, including cases like Ambuja Cements Eastern Ltd. vs CCE Raipur, CCE Bangalore- I vs Alfred Herbert (India) Ltd., and UOI vs Hindustan Zinc Ltd., to support the claim that the disputed items were indeed eligible for cenvat credit.

3. Revenue's Argument: On the contrary, the Revenue's representative contended that based on the nature and use of the disputed goods in the factory, they should not be considered as 'Input.' The Revenue cited decisions from the Hon'ble Andhra Pradesh High Court and the case of Cosmos Ispat (P) Ltd. to support their stance.

4. Judicial Analysis: After hearing both parties and examining the records, the Tribunal considered the judgments cited by the appellant's counsel. The Tribunal noted that when goods are essential for the operation and maintenance of machinery directly involved in manufacturing excisable goods, they should be deemed as 'Input.' The Tribunal specifically highlighted the judgment of the Hon'ble Rajasthan High Court in the case of Hindustan Zinc Ltd., which upheld the eligibility of such goods as 'Input.' Therefore, the Tribunal concluded that the appellant was entitled to cenvat credit on the disputed goods, and the appeal was allowed by overturning the impugned order.

5. Conclusion: The Tribunal's decision was based on the interpretation of the term 'Input' in alignment with the judgments from relevant High Courts and the Supreme Court. By following the precedent set by the Hon'ble Rajasthan High Court, the Tribunal ruled in favor of the appellant, allowing them to claim cenvat credit on the disputed goods.