2008 (9) TMI 809 - AT - Central Excise

Cenvat/Modvat - Inputs - Welding table - Held that - From the definition of the input used, it is seen that all goods used in or in relation to the manufacture of final products are entitled for the credit even as input. The input includes the goods used in relation to manufacture of final products for any other purpose within the factory of production. The welding table is obviously used for welding which is used for production. So one can easily say that the welding table is used in relation to the manufacture of the final products, because the definition of the input is very wide and the scope is very large bringing within its the ambit, all the goods which are used within the factory in or in relation to the manufacture. In these circumstances, there is absolutely no justification in denying the credit - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Irregular availment of Cenvat credit on welding table.

Detailed Analysis:

1. Issue of Irregular Availment of Cenvat Credit: The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals-I), Bangalore, regarding the irregular availment of Cenvat credit on a welding table. The original authority had recovered the irregular credit and imposed a penalty. The appellants contended that the welding table should be entitled to Cenvat credit and raised various arguments supported by case laws. The Tribunal examined the definition of "inputs" under the Cenvat Credit Rules, 2004, which includes all goods used in or in relation to the manufacture of final products. The Tribunal noted that the welding table is used for production, making it eligible for credit as it falls within the wide scope of goods used within the factory for manufacturing purposes.

2. Interpretation of "Inputs" under Cenvat Credit Rules: The Tribunal emphasized that the definition of "inputs" encompasses goods used in relation to the manufacture of final products within the factory of production. Since the welding table is utilized for welding activities essential for production, it qualifies as an input under the broad definition provided in the Rules. The Tribunal agreed with the appellants that there was no justification for denying the credit on the welding table, especially considering the regular submission of returns by the appellants, which negated the need for invoking the extended period for scrutiny.

3. Decision and Relief Granted: Based on the comprehensive analysis of the issue, the Tribunal concluded that the appellants were entitled to the Cenvat credit on the welding table. The Tribunal found no merit in the demand for duty and deemed the imposition of a penalty unnecessary. Consequently, the appeal was allowed, providing the appellants with consequential relief. The judgment was pronounced in an open court on 26-9-2008.

In summary, the Tribunal's decision favored the appellants by recognizing the welding table as an eligible item for Cenvat credit under the broad definition of "inputs" provided in the Cenvat Credit Rules, 2004. The judgment highlighted the importance of interpreting the rules in a manner that aligns with the intended scope of credit availability for goods used in the manufacturing process.