2007 (11) TMI 649 - AT - Central Excise

Summary

Issues involved: Denial of Cenvat credit on various materials including M.S. plates, S.S. plates, H.R. S.S. / B.R. S.S./C.R.S.S. Plates / Flats /Shapes, steel bars, Asbestos, and Graphite packing.

Denial of Cenvat credit on M.S. plates, S.S. plates, etc.: The appellant appealed against the denial of Cenvat credit on these items used for repairing and maintenance of machinery. The learned Advocate cited precedents where similar items were held eligible for credit. The Commissioner (Appeals) observed that these items were used as raw materials of capital goods and for repairing damaged parts of machinery. Referring to a case involving Hindustan Zinc Ltd., it was noted that M.S./S.S. Plates used in maintenance and repair of machinery for manufacturing final products are eligible for Modvat credit. The Tribunal's decision allowing credit on such items was upheld, leading to the appeal being allowed.

Denial of Cenvat credit on Asbestos Graphite Packing: The Commissioner (Appeals) denied credit on these packings used to prevent leakage in pipes, alleging they function as mechanical seals. However, citing a case involving KCP Sugar and Industries Ltd., it was established that Asbestos Graphite Packing used for preventing leakage in pipes are eligible for Cenvat credit. Consequently, the denial of credit on these items was deemed unjustified, and the impugned order was set aside, allowing the appeal with consequential relief.

Separate Judgement: No separate judgment was delivered by the judges in this case.