2014 (3) TMI 594 - AT - Central Excise

Availment of CENVAT Credit - Whether CENVAT credit can be allowed on welding electrodes used in repair of plant and machinery - Held that - appellants had given exact place of use of the impugned items. If the adjudicating authority or the appellate authority was in doubt in accepting the declaration they should have themselves verified the declaration by making a visit to the factory. Since no such effort has been made, I am inclined to go by the declaration given by the appellant and prima facie it would appear that these items were parts and accessories of capital goods or used as inputs for fabricating capital goods in the factory and there is no reason to deny CENVAT credit on these items. Therefore, I grant waiver of predeposit of dues arising from the impugned orders for admission of the appeals and stay its collection during the pendency of the appeals - Stay granted.

Summary

Issues Involved:
CENVAT credit on parts and accessories of capital goods during specific periods.

Analysis:
The judgment pertains to three appeals concerning the issue of CENVAT credit taken on parts and accessories of capital goods during different periods. The appellant claimed credit for items like MS flats, storage racks, MS pipes, angles, bolts, nuts, and welding electrodes used in the maintenance and repair of machinery in the factory. The counsel provided a detailed worksheet specifying the materials, quantities, excise duty, and the machinery each item was used for. However, the adjudicating authority and the appellate authority found that the appellant failed to prove the specific usage of the impugned goods.

A key contention in the case was the controversy surrounding whether CENVAT credit could be allowed on welding electrodes used in the repair of plant and machinery. The judgment highlighted conflicting decisions by various High Courts on this matter. Additionally, the Supreme Court had referred a similar issue to a Larger Bench in a previous case.

The judge noted that in other instances, the appellants had accurately indicated the usage of the disputed items. The judge expressed dissatisfaction with the authorities for not verifying the declarations by visiting the factory. As a result, the judge leaned towards accepting the appellant's declarations, indicating that the items were indeed parts and accessories of capital goods or used as inputs for fabricating capital goods in the factory. Consequently, the judge granted a waiver of predeposit of dues arising from the impugned orders for the admission of the appeals and stayed the collection of dues during the appeal proceedings.