2011 (11) TMI 282 - AT - Central Excise

CENVAT credit in respect of welding electrodes for repair and maintenance of plant and machinery - Held that - CENVAT credit can be availed on welding electrodes which are used for maintenance of plant and machinery. See Ambuja Cements Eastern Ltd. vs. CCE, Raipur (2010 - TMI - 77888 - Chhaitisgarh High Court).

Summary

Issues involved: Entitlement to Cenvat credit for welding electrodes used in repair and maintenance of plant and machinery.

Analysis:
The Appellate Tribunal, after hearing both sides, identified the central issue in the appeal as the entitlement of the appellants to the benefit of Cenvat credit for welding electrodes used in plant and machinery repair and maintenance. The Tribunal noted that this issue had been settled in favor of the assessee by various High Court decisions, including Ambuja Cements Eastern Ltd. vs. CCE, Hindustan Zinc vs. Union of India, and CCE, Bangalore-I vs. Alfred Herbert (India) Ltd. The Tribunal also referred to the recent decision in Nangganj Sihori Sugar Co.Ltd. vs. CCE, Lucknow, where similar submissions were considered. The Tribunal highlighted that the duty paid on welding electrodes used for plant and machinery maintenance is eligible for Cenvat credit based on the precedent set by the High Courts.

The Tribunal carefully considered the submissions from both sides and emphasized the binding nature of the High Court judgments on the issue. It distinguished the Division Bench's decision in the case of Vikram Cement and the Supreme Court's decision in the case of Ramala Sahkari Chini Mills Ltd. The Tribunal noted that the matter referred to the Larger Bench of the Supreme Court indicated that the High Court judgments held more binding force at that juncture. Consequently, the Tribunal set aside the impugned order based on the binding precedent established by the High Court decisions.

Ultimately, the Tribunal decided the issue by following the ratio of the aforementioned decisions, leading to the setting aside of the impugned orders and allowing both appeals with consequential relief to the parties. The judgment was pronounced in open court, concluding the matter regarding the entitlement to Cenvat credit for welding electrodes used in plant and machinery repair and maintenance.