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2015 (11) TMI 1160 - AT - Central ExciseDenial of CENVAT Credit - Capital goods - whether the appellant was eligible for cenvat credit of duty paid on MS sheets, angles, plates, beams etc - Held that - As per directions of the Hon ble High Court does not require to go beyond the observations therein. Since the matter has been remanded for a limited consideration of the decisions applicable to the facts in this case and also to consider the decision in the case of Sree Rayalaseema Hi-strength Hypo Ltd. 2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT and apply the same to the facts in this case, going beyond that would not be appropriate. Therefore even though I have reproduced several other decisions hereinabove, I consider that the issue has been dealt with adequately as per the directions of the High Court - High Court of Andhra Pradesh decision in the case of Rashtriya Ispat Nigam Ltd. (2011 (4) TMI 1098 - ANDHRA PRADESH HIGH COURT ) is applicable to the facts of this case and further there is another decision of Hon ble High Court of Rajasthan in the case of Hindustan Zinc (2006 (5) TMI 44 - HIGH COURT RAJASTHAN ) which has been affirmed by the Hon ble Supreme Court which also considers similar set of facts and therefore is applicable to the issue - Decided against Revenue.
Issues Involved:
1. Eligibility for CENVAT credit on MS sheets, angles, plates, beams, etc., used for repair and maintenance of machinery. 2. Interpretation and application of relevant High Court and Supreme Court decisions. 3. Jurisdictional High Court's precedence and its binding nature. 4. Evidence of usage of materials for repair and maintenance. Detailed Analysis: 1. Eligibility for CENVAT Credit on MS Sheets, Angles, Plates, Beams, etc.: The primary issue was whether the appellant was eligible for CENVAT credit on MS sheets, angles, plates, beams, etc., used in the factory for repair and maintenance of machinery. The appellant argued that usage in repair and maintenance suffices for eligibility. The Tribunal initially allowed the appeal based on precedents from various High Courts favoring the appellant. 2. Interpretation and Application of Relevant High Court and Supreme Court Decisions: The Tribunal's decision was challenged, and the Hon'ble High Court remanded the matter for fresh consideration, emphasizing the need to follow the jurisdictional High Court's judgment. The High Court framed the question of law regarding quasi-judicial indiscipline by not following the jurisdictional High Court's judgment. The Revenue cited the Andhra Pradesh High Court's decision in Sree Royalaseema Hi-Strength Hypo Ltd. v. CCE, Tirupati, which held that goods used for repairs and maintenance cannot be considered as inputs or capital goods for CENVAT credit. The Tribunal had to consider whether this decision applied to the current case. 3. Jurisdictional High Court's Precedence and Its Binding Nature: The Tribunal acknowledged the need to follow the jurisdictional High Court's decision. The Tribunal noted that the High Court of Andhra Pradesh in Rashtriya Ispat Nigam Ltd. had previously ruled in favor of the assessee, allowing CENVAT credit for MS sheets, plates, etc., used in repairs as capital goods. The Tribunal found that the definition of 'capital goods' under Rule 2(b) of the CENVAT Credit Rules was applicable, distinguishing it from the definition of 'inputs' considered in Sree Royalaseema Hi-Strength Hypo Ltd. 4. Evidence of Usage of Materials for Repair and Maintenance: The Revenue argued that the appellant failed to provide evidence of the specific usage of the materials for repair and maintenance. The Tribunal, however, limited its consideration to the High Court's directions, focusing on the applicability of relevant judicial decisions rather than delving into factual evidence. Conclusion: The Tribunal concluded that the decision in Rashtriya Ispat Nigam Ltd. was applicable and supported the appellant's case. Additionally, the Tribunal referred to other supporting decisions, including those from the Rajasthan High Court and the Supreme Court, which upheld the eligibility of CENVAT credit for similar materials used in repairs. Consequently, the Tribunal rejected the Revenue's appeal, affirming the appellant's eligibility for CENVAT credit. Order: The appeal filed by the Revenue was rejected, and the Tribunal's decision was pronounced and dictated in open court.
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