2017 (7) TMI 1117 - HC - Central Excise

CENVAT credit - input - welding electrodes used for repairs and maintenance of plant and machinery - Held that - This Court in Lloyd Metals & Engineers Ltd. 2009 (11) TMI 313 - BOMBAY HIGH COURT on principle held that material used for repairs and maintenance of capital goods cannot be considered to be an input under Cenvat Credit Rules, 2004 - We cannot depart from the view taken therein and the distinctions shown by Mr. Thakur does not warrant our ignoring the binding precedent and/or refering it to the Hon ble the Chief Justice to constitute Larger Bench - the substantial question of law is answered in affirmative i.e. in favor of respondent-Revenue and against appellant-assessee.

Summary

Issues:
Challenge to order of Customs, Excise Service Tax Appellate Tribunal regarding eligibility of welding electrodes for input credit under Cenvat Credit Rules, 2001.

Analysis:
The appeal under Section 35G of the Central Excise Act, 1944 challenges the Tribunal's order regarding the eligibility of welding electrodes for input credit under the Cenvat Credit Rules, 2001. The substantial question of law was reframed to determine if welding electrodes used for repairs and maintenance of plant and machinery qualify for input credit. The mistake of using 'capital goods' instead of 'input' in the question was rectified. The central issue is whether welding electrodes used for repairs and maintenance of plant and machinery are eligible for credit under the Cenvat Credit Rules, 2001.

The respondent asserts that the issue is settled in their favor based on a previous decision by the Court. The definition of 'input' in the Cenvat Credit Rules, 2001 is considered identical to that in the Cenvat Credit Rules, 2004. The appellant argues that the previous decision should not apply to their case as they believe welding electrodes used for repairs and maintenance should be eligible for credit due to their critical role in manufacturing. However, the Court refers to a past judgment which held that materials used for repairs and maintenance of capital goods cannot be considered as inputs under the Cenvat Credit Rules. This precedent has been binding for eight years, and the Court finds no reason to deviate from it or refer it to a Larger Bench.

Therefore, the Court concludes that the question of law is decided against the appellant in favor of the respondent based on the precedent set by the previous judgment. The Court notes that the decision in question is under consideration by the Supreme Court, but as it has not been stayed, the appeal is dismissed with no order as to costs.