2011 (7) TMI 599 - AT - Central Excise

Cenvat credit on welding electrodes S.S.Coil, M.S.Angle, M.S.Channels, Joists - disallowance as capital goods used in the maintenance and repairs of plant and machinery already installed in their factory premises - Held that - As decided in Vandana Global Ltd. vs. CCE, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) M.S.Angle, M.S.Channels, Joists used as supporting structures of equipments & the credit on these items is not admissible as these are not the inputs under the definition of input. Welding electrodes used for repair and maintenance of plant and machinery are not eligible for credit as decided in JAYPEE REWA PLANT Versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR 2003 (3) TMI 145 - CEGAT, NEW DELHI - against assessee.

Summary

Issues:
1. Availability of cenvat credit on welding electrodes and other items used for maintenance and repairs of plant and machinery.

Detailed Analysis:

Issue 1: Availability of cenvat credit on welding electrodes and other items used for maintenance and repairs of plant and machinery

The case involved an appeal against the disallowance of cenvat credit on welding electrodes, S.S. Coil, M.S. Angle, M.S. Channels, and Joists used for maintenance and repair of plant and machinery. The appellants claimed these items as inputs or capital goods for availing the credit under Cenvat Credit Rules, 2002/2004. The Revenue contended that these items did not qualify as inputs or capital goods for credit eligibility. The Tribunal considered the use of these items in maintenance and repairs, citing precedents like Vandana Global Ltd. vs. CCE, Raipur and Maruti Suzuki Ltd. vs. CCE, Delhi-III. The Tribunal noted that the items like M.S. Angle, M.S. Channels, and Joists were used as supporting structures, not qualifying as inputs. The credit on welding electrodes was disallowed based on the decision in Jaypee Rewa Plant vs. CCE, Raipur. The Tribunal further referenced cases like Kisan Sahakir Chini Mills Ltd. vs. CCE, Meerut-II and Vikram Cement vs. CCE, Indore, emphasizing that repair and maintenance activities do not constitute the manufacturing process, hence the credit was not admissible.

In conclusion, the Tribunal dismissed the appeal, upholding the disallowance of cenvat credit on welding electrodes and other items used for maintenance and repairs of plant and machinery. The decision was based on the items not meeting the criteria of inputs or capital goods as per the Cenvat Credit Rules, supported by relevant case laws and precedents.