2014 (3) TMI 122 - AT - Central Excise

Availment of CENVAT Credit - Credit denied on ground that goods does not qualify as capital goods - Held that - HR Plates, MS Plates, SS Plates, Weld etc have been used for maintenance and repairs of the capital goods. Therefore, as held by the Hon ble High Court of Rajasthan in the case of Union of India vs. Hindustan Zinc Ltd 2006 (11) TMI 551 - SUPREME COURT OF INDIA that input credit on the items which were used for repairs and maintenance of the capital goods is eligible to the assessee - Decided in favour of assessee.

Summary

Issues:
Appeal against denial of input credit on HR Plates, MS Plates, SS Plates, Weld under Chapter 72 of Central Excise Tariff Act, 1984.

Analysis:
The judgment delivered by Ashok Jindal in the Appellate Tribunal CESTAT MUMBAI pertained to an appeal where the appellants contested the denial of input credit on various items like HR Plates, MS Plates, SS Plates, and Weld. The impugned order rejected the input credit on the grounds that these items did not qualify as capital goods according to Chapter 72 of the Central Excise Tariff Act, 1984. However, it was acknowledged that these items were indeed used in the repair and maintenance of capital goods. The judgment cited precedents to support the appellants' claim, referring to the decisions of various High Courts and the Apex Court. Specifically, the judgment mentioned the case of Union of India vs. Hindustan Zinc Ltd., where the High Court of Rajasthan and the Apex Court affirmed that input credit on items used for repairs and maintenance of capital goods is permissible. Similar views were upheld by the High Courts of Karnataka and Chhattisgarh in other cases. Consequently, the judgment concluded that the appellant was entitled to the input credit on the items in question, which were utilized for the repair and maintenance of capital goods. As a result, the impugned order was set aside, and the appeal was allowed, with any consequential relief deemed appropriate.

This judgment underscores the significance of the purpose for which certain items are used in the context of claiming input credit under the Central Excise Tariff Act, 1984. It clarifies that items utilized for the repair and maintenance of capital goods can qualify for input credit, as established by legal precedents. The judgment highlights the consistency in judicial decisions across different High Courts and the Apex Court regarding the eligibility of input credit in similar circumstances. By referencing these precedents, the judgment establishes a clear legal basis for allowing the appellant's claim for input credit on the items in question. Overall, the judgment provides a comprehensive analysis of the issue at hand, emphasizing the importance of legal precedents and the specific application of the law in determining the eligibility for input credit in the given scenario.