2013 (6) TMI 144 - HC - Central Excise

Cenvat credit on items M.S. Plate, SS Plate, Beams, Hr Coils, plain Plates, Channels, Angles Joist etc, used in fabrication and erection of various sections in existing plants - capital goods - held that - such goods which are necessary for running of plant and upkeeping of the machinery directly involved in the manufacturing and products were held to be eligible to avail Modvat credit. - Following the decision in Union of India vs. Aditya Cement (2007 (3) TMI 190 - HIGH COURT RAJASTHAN), decided in favor of assessee.

Summary

Issues involved:
Admissibility of Cenvat credit on specific items used in fabrication and erection of various sections in existing plants as 'capital goods' under Cenvat Credit Rules, 2004.

Analysis:
The High Court admitted the appeal based on the substantial question of law regarding the allowance of Cenvat credit on items like M.S. Plate, SS Plate, Beams, Hr Coils, plain Plates, Channels, Angles Joist, etc., used in fabrication and erection of sections in existing plants. The respondent's counsel argued that a Division Bench of the Court had already considered and decided a similar issue in a previous case involving the same respondent. The judgment in the case of Aditya Cement vs. Union of India was cited, which established the eligibility of such items as capital goods for availing Modvat credit. The appellant's counsel could not counter these arguments or distinguish the previous judgments on facts or law.

The Court examined the impugned order and noted that the issue in the present appeal had already been resolved in a previous case involving the same respondent. The judgment delivered in the previous case reiterated that goods essential for the upkeep and maintenance of plant and machinery directly used in manufacturing excisable articles qualify as capital goods eligible for Modvat credit. The Court emphasized the importance of such goods for the smooth functioning and efficiency of the manufacturing process. Based on the previous decisions and the well-considered order in the earlier case, the Court found that the present appeal was fully covered by the previous judgments, some of which had also been affirmed by the Apex Court.

In light of the precedents and decisions in similar cases, the Court concluded that there was no merit in the present appeal. The appeal was dismissed based on the reasons provided in the previous judgments involving the same parties, reaffirming the eligibility of specific items as capital goods for availing Modvat credit.