2015 (12) TMI 1263 - AT - Central Excise

Availment of CENVAT Credit - welding electrodes - Held that - Tribunal allowed cenvat credit on welding electrodes used in or in relation to the manufacture of finished goods. By respectfully following the High Court s decision (2006 (6) TMI 114 - MADRAS HIGH COURT ), I hold that the assessee is eligible for availing cenvat credit on welding electrodes used in or in relation to the manufacture of finished products. - Revenue relying on the Vikram Cement Vs. CCE, Indore (2009 (7) TMI 217 - CESTAT, NEW DELHI), is not relevant in view of the jurisdictional High Court of Madras decision and other Hon ble High Court orders as discussed above, I am of the view that the impugned order, is not sustainable - Decided in favour of assessee.

Summary

Issues:
- Availment of credit on welding electrodes under Cenvat Credit Rules, 2004

Analysis:

The case involves M/s. Beekay Steel Industries Limited appealing against the Order in Appeal passed by the Commissioner (Appeals) regarding the availment of cenvat credit on welding electrodes used in the manufacture of finished goods falling under chapter heading No. 72 of the CETA, 1985. The dispute covers the period from April 2008 to July 2010, with multiple SCNs issued objecting to the cenvat credit availed by the appellants on welding electrodes. The adjudicating authority and the Commissioner (Appeals) held that the welding electrodes, used for working on capital goods, do not qualify as "Input" under the Cenvat Credit Rules, 2004, and thus are not eligible for cenvat credit.

The appellant argued that the impugned order violated principles of natural justice as it did not consider their arguments properly. They contended that the demand in the first SCN was time-barred and highlighted specific instances where the welding electrodes were used directly in the manufacturing process. The appellant relied on various citations to support their contentions. On the other hand, the Ld. AR supported the findings of both the adjudicating authority and the Commissioner (Appeals), citing a judgment that credit on welding electrodes used for repair and maintenance is not available as input.

Upon hearing both sides and examining the records, the Tribunal found that the issue revolved around the availment of credit on welding electrodes during the period covered by the SCNs under Rule 14 of CCR, 2004. The Tribunal referred to several citations provided by the appellant, where it was held that welding electrodes used in or in relation to the manufacture of finished goods are eligible for cenvat credit. By following the decisions of the High Court and the Tribunal, the Tribunal allowed the cenvat credit on welding electrodes, contrary to the findings of the Commissioner (Appeals) and the adjudicating authority.

In conclusion, the Tribunal held that the impugned order was not sustainable based on the precedents cited and set it aside, allowing the appeal of M/s. Beekay Steel Industries Limited regarding the availment of cenvat credit on welding electrodes used in the manufacture of finished goods.