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2009 (7) TMI 1046 - AT - Central ExciseCENVAT credit - welding electrodes - whether the manufacturer is entitled for credit in respect of welding electrodes which are used for maintenance and repair of the machinery as capital goods? - penalty - Held that - welding electrodes which are used for the maintenance and repair of the machinery are not entitled for the credit as capital goods - earlier as there was divergent views therefore it is not a case for imposition of any penalty. CENVAT credit - foundation bolts - Held that - The issue is already settled by the Tribunal in the case of Reliance Industries Ltd. v. CCE, Surat 2005 (10) TMI 203 - CESTAT, MUMBAI in favor of the assessee - credit allowed. Appeal allowed - decided partly in favor of assessee.
Issues:
1. Entitlement to credit for welding electrodes used for maintenance and repair of machinery as capital goods. 2. Entitlement to credit for foundation bolts. Analysis: Issue 1: Entitlement to credit for welding electrodes used for maintenance and repair of machinery as capital goods The Revenue contended that previous decisions by the Tribunal and High Courts denied credit for welding electrodes used in repair and maintenance of machinery. They cited cases like SAIL v. CCE and UOI v. Hindusthan Zinc Ltd. The Larger Bench of the Tribunal in Triveni Engg. & Industries Ltd. v. CCE also held that welding electrodes are not considered capital goods under Rule 57Q of Central Excise Rules. On the other hand, the Respondent argued that other judgments, such as Hindusthan Zinc Ltd. v. UOI and CCE, Tiruchirapalli v. India Cements Ltd., allowed credit for welding electrodes used in maintenance. The judge noted the dismissal of S.L.P. by the Supreme Court in SAIL v. CCE and concluded that welding electrodes used for maintenance and repair are not entitled to credit as capital goods. No penalty was imposed due to conflicting views previously. Issue 2: Entitlement to credit for foundation bolts The Appeal also addressed the issue of credit for foundation bolts amounting to Rs. 670. The Tribunal had previously ruled in Reliance Industries Ltd. v. CCE that such credit should be allowed. The judge found no issue with the credit for foundation bolts and allowed the Appeal accordingly. The judgment was pronounced and dictated in the open court.
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