2017 (1) TMI 485 - AT - Central Excise

Cement - CENVAT credit - welding electrodes and gases used in repair maintenance of capital goods - Held that - the definition of input post 1-3-2011 is more expansive broadbanded and includes all goods used in the factory there being no caveat that such goods should only be used in or in relation to manufacture of final products. Reliance placed in the case of M/s. Cement Corporation of India v. CCE Hyderabad 2016 (7) TMI 490 - CESTAT HYDERABAD involving period 1-11-2011 to 31-10-2012 after the said amendment has held that the credit cannot be denied on welding electrodes used for repair and maintenance. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Eligibility of Cenvat credit on welding electrodes and gases used in repair, maintenance of capital goods.

Analysis:
1. The appellant, a cement manufacturer, appealed against the denial of Cenvat credit on welding electrodes and gases used in repair and maintenance of capital goods from April 2001 to January 2012. The total credit denied was ?43,373, with ?31,294 for welding electrodes and ?12,079 for gases.

2. The appellant's advocate cited various cases supporting their claim, including Cement Corporation of India Ltd. v. CCE, Hyderabad and ACC Ltd. v. CCE & ST, LTU, Mumbai. The department, represented by the AR, opposed the appeal, referring to a decision by the High Court of Andhra Pradesh that welding electrodes for repair and maintenance are not eligible for credit, although the matter was pending in the Apex Court.

3. The Tribunal noted that the definition of 'input' under the Cenvat Credit Rules, 2004 was amended in 2011 to include all goods used in the factory, without the previous requirement of being used in or in relation to the manufacture of final products.

4. Considering the amended definition, the Tribunal held that there was no legal impediment for the appellant to avail credit on welding electrodes and gases used in repair and maintenance of capital goods during the disputed period.

5. The Tribunal distinguished the Andhra Pradesh High Court decision, which was based on the pre-amendment definition, and cited its own decisions in similar cases where credit was allowed for welding electrodes and gases used in repair and maintenance of plant and machinery.

6. Based on the precedents and the amended definition of 'input,' the Tribunal allowed the appeal, granting the appellant the eligibility to avail credit for welding electrodes and gases, with consequential benefits as per law.