2016 (12) TMI 777 - AT - Central Excise

CENVAT credit - whether the items, welding electrodes, M.S. Plates, Channels, Angles, H.R. Coils, Shapts, Bolds etc. are eligible for Cenvat Credit as capital goods or spares, components or accessories thereof as defined in Cenvat Credit Rules, 2004 or not? - Held that - Welding electrodes etc., which are used for repair and miantenance of plant and machinery, are part of manufacturing process and are eligible to modvat Credit - it is further held that the welding electrodes used by the appellants in repair and maintenance and fabrication of machinery parts are eligible inputs. I also find that as the present issue is interpretational, extended period of limitation, is not invocable - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues: Determination of eligibility for Cenvat Credit on specific goods under the Cenvat Credit Rules, 2004.

Analysis:
The appellant, a manufacturing company, appealed against an order passed by the Commissioner (Appeals) Customs & Central Excise, Meerut-I, regarding the utilization of Cenvat credit on certain goods. The appellant was engaged in the production of sugar and molasses falling under specific chapters of the Central Excise Tariff Act, 1985, and was availing the Cenvat credit facility on duty paid inputs and capital goods as per Rule-3 of the Cenvat Credit Rules, 2002. Upon scrutiny of their monthly returns, it was found that the appellant had wrongly utilized Cenvat credit on goods like M.S. Plate, Angle/M.S. Angle, Girder, H.R. Coils, and Welding Electrodes, which did not fall under the definition of capital goods as per Rule-2(a) of the Cenvat Credit Rules, 2004.

The key issue for determination was whether specific items like welding electrodes, M.S. Plates, Channels, Angles, H.R. Coils, Shapts, Bolds, etc., were eligible for Cenvat Credit as capital goods or related components under the Cenvat Credit Rules, 2004. The Tribunal referred to a previous ruling in the appellant's own case, where it was established that welding electrodes used for repair, maintenance, and fabrication of machinery parts were considered eligible inputs for Cenvat Credit. The Tribunal held that as the issue was interpretational and settled by previous rulings, the extended period of limitation was not applicable. Following the precedent set in the appellant's previous case, the impugned order was set aside, and the appeal was allowed with consequential reliefs, if any.

In conclusion, the Tribunal's decision clarified the eligibility criteria for Cenvat Credit on specific goods under the Cenvat Credit Rules, 2004, based on previous rulings and interpretations. The judgment emphasized the importance of adherence to the defined criteria for claiming Cenvat Credit on capital goods and related components, ensuring compliance with the provisions of the Central Excise Tariff Act, 1985.