2017 (5) TMI 941 - AT - Central Excise

CENVAT credit - welding electrode - It is the case of the appellant that welding electrodes were used by them for fabrication/installation of various machineries in the factory premises - CENVAT credit is sought to be denied by recording that welding electrodes were used for repairing and maintenance of plant and machinery - Held that - welding electrodes were used only for installation of capital goods and were not used for repair and maintenance of plant and machinery is also not supported by any evidence - the claim of the appellant that the welding electrodes are used for fabrication of supporting structure and capital goods being not contraverted, the ratio of the decision of Sree Rayalaseema Hi-Strength Hypo Ltd 2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT , covers the issue of assessee, where it was held that unless the welding electrodes used in the manufacture of capital goods, which are thereafter used in the factory do not qualify as inputs, CENVAT credit cannot be claimed - credit allowed - appeal allowed - decided in favor of assessee.

Summary

Issues:
Whether the appellant is eligible for CENVAT credit of welding electrode consumed during a specific period.

Analysis:
The appeal considered the eligibility of the appellant for CENVAT credit of welding electrodes consumed between August 2005 to February 2009. The appellant claimed the welding electrodes were used for fabrication/installation of various machineries, while the lower authorities contended they were used for repairing and maintenance of plant and machinery. The appellant argued that the welding electrodes were used for erection and installation of structures forming part of capital goods. The Division Bench referred to a judgment and held that welding electrodes used in the fabrication of support structures are eligible for CENVAT credit. The lower authorities' finding that the welding electrodes were used only for installation of capital goods and not for repair and maintenance lacked concrete evidence. Therefore, the impugned order was deemed unsustainable.

The decision in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. was also examined, which stated that unless welding electrodes used in the manufacture of capital goods do not qualify as inputs, CENVAT credit cannot be claimed. Since the appellant's claim that welding electrodes were used for fabrication of supporting structure and capital goods was not disputed, the decision supported the appellant's position. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment showcases the considerations made regarding the appellant's eligibility for CENVAT credit of welding electrodes, the interpretation of relevant legal precedents, and the ultimate decision reached by the tribunal.