2018 (4) TMI 1449 - AT - Central Excise

CENVAT credit - capital goods - duty paid LPG gas - Held that - the issue has came up before the Tribunal in the case of Singhal Enterprises Pvt. Ltd. vs. CC&CE, Raipur 2016 (9) TMI 682 - CESTAT NEW DELHI , where it was held that applying the User Test to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of Capital Goods as contemplated under Rule 2(a) of the CCR, hence will be entitled to the Cenvat Credit - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues: Department's appeal against Order-in-Appeal allowing cenvat credit on duty paid LPG gas used for repair and maintenance of capital goods.

In this case, the department filed an appeal against the Order-in-Appeal allowing cenvat credit on duty paid LPG gas used for repair and maintenance of capital goods by the respondent. The period of dispute was from February 2011 to November 2015. The appellants were involved in the manufacture of sponge iron, pig iron, and steel items attracting Central Excise duty, availing cenvat credit on inputs, capital goods, and input services as per the Cenvat Credit Rules, 2004. The respondent had procured duty paid LPG gas during the period under consideration and used it in the repair and maintenance of various capital goods. The Commissioner (Appeals) allowed the credit, which was contested by the department, leading to the present appeal.

The Tribunal referred to a previous judgment regarding the definition of "Capital Goods" under the Cenvat Credit Rules, 2004, specifically mentioning the case of Singhal Enterprises Pvt. Ltd. vs. CC&CE, Raipur. It was noted that while the High Court of Allahabad had previously disallowed credit on Welding Electrodes as capital goods, various decisions by the Tribunal and other High Courts had allowed such credit, treating welding electrodes used for repair and maintenance as "Inputs" under the Cenvat Credit Rules. Citing cases like Ambuja Cements Eastern Ltd. v. Commissioner of Central Excise, Raipur and Hindustan Zinc Limited v. Union of India, the Tribunal held that the appellants were entitled to the credit on welding electrodes as inputs.

Based on the precedent set by previous decisions and following their earlier order, the Tribunal found no reason to interfere with the impugned order allowing the cenvat credit on duty paid LPG gas used for repair and maintenance of capital goods. Consequently, the department's appeal was dismissed, upholding the decision to grant the cenvat credit to the respondent.