2011 (1) TMI 1060 - AT - Central Excise

Modvat credit in respect of welding electrodes used for repair and maintenance of plant and machinery denied - Held that - As decided in Ambuja Cements (2010 (4) TMI 429 - CHHAITISGARH HIGH COURT), Hindustan Zinc Ltd. (2008 (7) TMI 55 - HIGH COURT RAJASTHAN) and Alfred Herbert (India) Ltd. (2010 (4) TMI 424 - KARNATAKA HIGH COURT) welding electrodes other items used for repair and maintenance of plant and machinery would be eligible for cenvat credit. Modvat credit in respect of supporting structures- Held that - As relying on APP Ltd. 2013 (7) TMI 494 - CESTAT BANGALORE modvat calim is to be allowed. Issues are prima facie covered in favour of the appellants. Accordingly, dispense with the conditions of pre-deposit of duty and penalty of Rs.20,000/- and allow the stay petition

Summary

Issues:
1. Admissibility of modvat credit for welding electrodes used in repair and maintenance of plant and machinery.
2. Admissibility of modvat credit for supporting structures like M.S. plates and MS angles for machinery.

Analysis:

Issue 1:
The judgment addresses the confirmation of a demand of Rs.1,70,432/- against the appellant concerning the admissibility of modvat credit for welding electrodes used in the repair and maintenance of plant and machinery. The Bench notes the appellant's argument citing various High Court decisions supporting the admissibility of such credit for modvat purposes. References to cases like Ambuja Cements Eastern Ltd. vs. CCE, Hindustan Zinc vs. Union of India, and CCE vs. Alfred Herbert (India) Ltd. are made to bolster the appellant's stance. The Advocate's submission is supported by legal precedents, indicating a favorable view towards allowing modvat credit for welding electrodes used in repair and maintenance activities.

Issue 2:
Regarding the admissibility of modvat credit for supporting structures such as M.S. plates and MS angles for machinery, the Advocate directs attention to a recent decision in the case of CCE vs. M/s. APP Ltd. The judgment in this case, as per the Advocate, challenges the validity of the law declared in the Larger Bench judgment of Vandana Global Ltd., suggesting that it contradicts subsequent rulings of the Apex Court in the case of Rajasthan Spg. & Wvg. Mills. The Bench acknowledges the Advocate's argument and finds that both issues are prima facie covered in favor of the appellants. Consequently, the Bench dispenses with the conditions of pre-deposit of duty and penalty amounting to Rs.20,000/-, allowing the stay petition in favor of the appellants. The judgment concludes with the pronouncement made in the open court, reflecting the decision to grant relief to the appellants based on the arguments presented regarding the admissibility of modvat credit for welding electrodes and supporting structures.