2011 (5) TMI 281 - AT - Central Excise

Cenvat Credit - Inputs - Whether the appellant, engaged in manufacturing of V.P.sugar with molasses as its by-product, are eligible for Cenvat Credit in respect of welding electrodes used in repair and maintenance for plant & machinery - As per the Hon ble Chhatisgarh High in the case of Ambuja Cement Eastern Ltd. vs. CCE, Raipur 2010 -TMI - 77888 - CHHAITISGARH HIGH COURT wherein both the High Courts have held that welding electrodes used for repair & maintenance of plant & machinery are eligible for Cenvat Credit as inputs as well as capital goods - Decided in favour of assessee.

Summary

Issues:
1. Eligibility of Cenvat Credit for welding electrodes used in repair and maintenance for plant & machinery.

Analysis:
The case revolves around the eligibility of the appellant, engaged in manufacturing V.P. sugar with molasses as a by-product, for Cenvat Credit concerning welding electrodes used in repair and maintenance for plant & machinery. The Deputy Commissioner, through an Order-In-Original, had decided against the appellant, confirming a Cenvat Credit demand of Rs.4,64,999/- along with interest. The Commissioner (Appeals) upheld this decision in an Order-In-Appeal. The appellant then filed an appeal against the Commissioner (Appeals) order.

During the proceedings, the advocate for the respondent cited judgments from the Hon'ble Rajasthan High Court and the Hon'ble Chhatisgarh High Court to support the appellant's position, arguing that the impugned order was not sustainable. On the other hand, the Departmental Representative defended the impugned order by reiterating the findings of the CCE (Appeals).

Upon careful consideration of the submissions and records, the judge referred to the judgments of the Hon'ble Rajasthan High Court and the Hon'ble Chhatisgarh High Court in similar cases. These judgments established that welding electrodes used for repair and maintenance of plant & machinery are eligible for Cenvat Credit as inputs and capital goods. The judge highlighted that the dismissal of the SLP filed against a related case by the Hon'ble Supreme Court did not set any binding precedent. Consequently, the judge held that the impugned order denying Cenvat Credit for welding electrodes used in repair and maintenance was unsustainable. The order was set aside, and the appeal was allowed.