2016 (4) TMI 142 - AT - Central Excise

Denial of cenvat credit on welding rods/electrodes used as inputs for repair and maintenance of plant and machinery - Held that - Appellants are eligible for input credit availed on electrodes used for repair and maintenance of the plant and machinery which in turn used for manufacture of final product. See CCE Trichy Vs India Cements 2006 (6) TMI 114 - MADRAS HIGH COURT

Summary

Issues:
Denial of cenvat credit on welding rods/electrodes used for repair and maintenance of plant and machinery.

Analysis:
The issue in this case pertains to the denial of cenvat credit on welding rods/electrodes used as inputs for the repair and maintenance of plant and machinery. Both adjudicating authorities disallowed the cenvat credit and imposed penalties. The Commissioner (Appeals) upheld the orders, leading to the appeals filed by the appellant-assessee before the Tribunal.

The appellant's advocate argued that the issue had been settled by the Hon'ble Madras High Court in a previous case involving the appellant. The advocate also referenced a Tribunal's order in another case to support their argument. On the other hand, the Revenue's representative reiterated the findings of the impugned orders.

After considering both sides, the Tribunal found that the issue revolved around the denial of input credit on welding electrodes used in the repair and maintenance of capital goods. The Tribunal noted that in a previous case involving the appellant, the Tribunal had allowed the appeal, and the Hon'ble Madras High Court had upheld the Tribunal's decision. The Tribunal referenced relevant paragraphs from the High Court's order to support its decision.

Citing previous decisions by the Larger Bench of the Tribunal and the Apex Court, the Tribunal held that welding electrodes used for repairs and maintenance are covered under the definition of capital goods. By following the High Court's decision and the Tribunal's precedent, the Tribunal concluded that the appellants were eligible for input credit on electrodes used for repair and maintenance of plant and machinery. Consequently, the impugned orders were set aside, and the appeals were allowed.