2018 (5) TMI 1045 - AT - Central Excise

CENAVT credit - inputs - welding electrodes received in the factory, consumed and used for the activity of fabricating of machinery of machinery - Held that - welding electrodes consumed in the factory of the appellant wherein manufacturing activity took place, credit cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availment of CENVAT credit on welding electrodes.
2. Determination of welding electrodes as inputs for CENVAT credit eligibility.

Analysis:
1. The appeals were filed against Orders-in-Appeal dated 24/02/2017 and 09/11/2015 by the Commissioner of Central Excise (Appeal), Mumbai Zone - II. The appellant availed CENVAT credit of Central Excise duty on welding electrodes used for fabricating machinery during specific periods. The Revenue contended that welding electrodes are not eligible inputs for credit.

2. The Tribunal found that the issue of availing CENVAT credit on welding electrodes had been previously addressed in various cases. It was established that welding electrodes were used and consumed in manufacturing activities, which was undisputed in the present appeals. Referring to past decisions like ACC Ltd v. Commissioner of Central Excise & Service Tax and others, the Tribunal held that CENVAT credit on Central Excise duty paid on welding electrodes should be allowed. Considering the definition of inputs under Rule 2(k) of the CENVAT Credit Rules, 2004, the Tribunal concluded that denial of CENVAT credit for welding electrodes used in manufacturing processes was not justified.

3. Consequently, the impugned orders were set aside, and the appeals were allowed. The Tribunal's decision was based on the established use of welding electrodes in the manufacturing process, aligning with previous judgments and the definition of inputs under the CENVAT Credit Rules, 2004.

Conclusion:
The judgment by the Appellate Tribunal CESTAT Mumbai clarified the eligibility of welding electrodes as inputs for availing CENVAT credit. By referencing past decisions and the definition of inputs under relevant rules, the Tribunal ruled in favor of allowing CENVAT credit for welding electrodes used in manufacturing activities, overturning the Revenue's denial of credit.