2017 (7) TMI 894 - AT - Central Excise

CENVAT credit - inputs - whether HR Coils Aluminium Coils Welding Rods etc. undisputedly used for the repair and maintenance of various capital goods in the factory premises of the appellant are eligible to CENVAT credit under the definition of input as prescribed under Rule 2 (k) of CCR 2004? - Held that - This issue has been considered by this Tribunal in Kissan Sahakari Chini Mills Ltd s case 2013 (7) TMI 2 - CESTAT NEW DELHI where it was held that the activity of repair and maintenance of plant and machinery is an activity which has direct nexus with manufacture of final products and the goods used in this activity would be eligible for Cenvat credit - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Eligibility of CENVAT credit on HR Coils, Aluminium Coils, Welding Rods for repair and maintenance of capital goods.

Comprehensive Analysis:
The appeal was filed against an order alleging wrong availment and utilization of CENVAT credit for the repair and maintenance of capital goods. The appellant contended that the items in question were used for repairing various machineries, storage tanks, etc., which are considered capital goods under Rule 2(a) of CCR, 2004. The advocate cited relevant judgments to support the eligibility of CENVAT credit on these items. The Revenue, represented by the Ld. AR, reiterated the findings of the Ld. Commissioner (Appeals) rejecting the appeal.

The key issue to be decided was whether HR Coils, Aluminium Coils, Welding Rods used for repair and maintenance of capital goods in the factory premises were eligible for CENVAT credit under Rule 2(k) of CCR, 2004. The Tribunal referred to previous judgments, notably the case of Hindustan Zinc Ltd., where it was held that goods used for repair and maintenance of plant and machinery are eligible for CENVAT credit. The Tribunal also highlighted the importance of repair and maintenance activities for smooth manufacturing, emphasizing the direct nexus with the manufacture of final products. The Tribunal concluded that the inputs used for repair and maintenance activities are essential for the manufacturing process and, therefore, eligible for CENVAT credit.

In light of the above considerations, the Tribunal upheld the appellant's appeal, setting aside the impugned order and allowing consequential relief as per the law. The Tribunal affirmed the eligibility of CENVAT credit on HR Coils, Aluminium Coils, Welding Rods used for the repair and maintenance of capital goods, in line with the established legal principles and judgments cited during the proceedings.