2013 (4) TMI 410 - AT - Central Excise

Eligibility for cenvat credit - welding electrodes used for repair and maintenance of plant and machinery - Held that - As decided in Ambuja Cements Eastern Ltd., (2010 (4) TMI 429 - CHHAITISGARH HIGH COURT), Hindustan Zinc Ltd. (2008 (7) TMI 55 - HIGH COURT RAJASTHAN), CCE, Bangalore-I vs. Alfred Herbert (India) Ltd. 2010 (4) TMI 424 - KARNATAKA HIGH COURT since without repair and maintenance, manufacturing operations, though theoretically possible, are not commercially feasible, the same has to be treated as an activity having nexus with manufacture and hence any inputs used for repair and maintenance would be eligible for cenvat credit. - order denying the cenvat credit is not sustainable. Rent a cab service availed for transportation of their employees from the residence to the factory and back - Held that - Decided in favour of the appellant as relying on Stanzen Toyotetsu India Pvt. Ltd. 2011 (4) TMI 201 - KARNATAKA HIGH COURT), CCE, Bangalore vs. Bell Ceramics Ltd. 2011 (9) TMI 792 - KARNATAKA HIGH COURT .

Summary

Issues:
1. Eligibility for cenvat credit in respect of welding electrodes used for repair and maintenance of plant and machinery.
2. Eligibility for cenvat credit of rent-a-cab service for transportation of employees.

Analysis:
1. The appellant, a sugar manufacturer, disputed eligibility for cenvat credit for welding electrodes and rent-a-cab services. The department issued a notice for recovery, interest, and penalty. The original authority confirmed the demand, but the penalty was set aside by the Commissioner (Appeals). High Court judgments favored cenvat credit for welding electrodes and rent-a-cab services. The appellant argued the denial of credit was unsustainable, citing relevant case law. The Revenue defended the order. The Tribunal noted the settled issue of cenvat credit eligibility for welding electrodes based on High Court judgments. The repair and maintenance activities were deemed linked to manufacturing, making the inputs eligible for credit.

2. Regarding cenvat credit for rent-a-cab services, High Court judgments supported the appellant's position. The Commissioner (Appeals) wrongly focused on evidence of service usage, not raised in the notice. As per legal principles, authorities cannot expand beyond show cause notice grounds. Therefore, the denial of credit based on service usage evidence was deemed incorrect. The Tribunal allowed the appellant's appeal and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the eligibility of the appellant for cenvat credit for welding electrodes and rent-a-cab services based on relevant case law and legal principles. The appellant's appeal was allowed with consequential relief, while the Revenue's appeal was dismissed.