2013 (6) TMI 240 - AT - Central Excise

Eligibility for CENVAT credit - welding electrodes, MS angles, CTD bars, MS bars and rods, tool bits, blank HR Plates etc. - appellant seeking waiver of predeposit - Held that - The issue of CENVAT credit on electrodes used in maintenance and repair of machinery stands referred to the Larger Bench of Supreme Court vide Ramala Sahkari Chini Mills Ltd. Vs. CCE - 2010 (11) TMI 34 - SUPREME COURT OF INDIA . In the case of other items also there is a dispute as to whether these are accessories to machineries or whether it can be considered as supporting structure for machinery. Since these issues are still under dispute before many courts and the matter is yet to be finally resolved by the higher forums, waiver of predeposit of the dues arising from the impugned orders for admission of the appeals allowed and stay its collections during the pendency of the appeals.

Summary

Issues:
Eligibility for CENVAT credit on welding electrodes and other items like MS angles, CTD bars, etc. for specific periods.

Analysis:
The issue in these appeals pertains to the eligibility for CENVAT credit on various items like welding electrodes, MS angles, CTD bars, MS bars and rods, tool bits, blank HR Plates for specific periods. The appellant contested the denial of CENVAT credit on the grounds that these items were essential for making capital goods, specifically steel formers used in furnaces. The appellant argued that welding electrodes were used in the production of steel formers, which are integral parts of the furnace. The contention was that these items should be considered inputs for making capital goods.

Regarding the eligibility of CENVAT credit on welding electrodes used in maintenance and repair of machinery, there were conflicting decisions. The appellant cited a case where the High Court allowed credit on welding electrodes used in the manufacture of final products. However, the Revenue argued that the fabrication of steel formers might not necessarily constitute maintenance of machinery or the creation of new capital machinery. The Revenue pointed out cases where CENVAT credit was denied on similar items used in repair and maintenance work, emphasizing the disputable nature of the issue.

The matter of CENVAT credit on electrodes used in maintenance and repair of machinery had been referred to the Larger Bench of the Supreme Court. Additionally, there was a dispute regarding other items, whether they were accessories to machinery or considered supporting structures. Given the ongoing disputes and lack of final resolution by higher forums, the presiding judge granted a waiver of predeposit of dues arising from the impugned orders for the admission of the appeals. The collections were stayed during the pendency of the appeals to allow for further examination and resolution of the issues in question.