2013 (11) TMI 331 - AT - Central Excise

Eligibility for Cenvat Credit - Whether welding electrodes used for repair and maintenance and M.S. Plates, Shapes, Sections, Channels, Plates, HR Plates also used for repair and maintenance of existing plant and machinery are eligible for Cenvat credit or not Held that - Following UOI vs. Hindustan Zinc Ltd. 2006 (5) TMI 44 - HIGH COURT RAJASTHAN - the welding electrodes used for repair and maintenance of plants and machinery are eligible for Cenvat credit - M.S. Plates used for repair and maintenance of plants and machinery are eligible for Cenvat credit order set aside - Decided in favour of Assessee.

Summary

Issues:
1. Eligibility of welding electrodes for Cenvat credit.
2. Eligibility of M.S. Plates, Shapes, Sections, Channels, Plates, HR Plates for Cenvat credit.

Eligibility of welding electrodes for Cenvat credit:
The dispute revolved around whether welding electrodes used for repair and maintenance are eligible for Cenvat credit. The department issued a show cause notice denying Cenvat credit for these items and demanding recovery of the availed credit along with penalties. The Assistant Commissioner confirmed the demand, but on appeal, the Commissioner (Appeals) upheld the decision with a reduced penalty. The appellant cited judgments from the Rajasthan and Chhattisgarh High Courts supporting the eligibility of welding electrodes for Cenvat credit. The Tribunal, perceiving no dispute regarding the usage of welding electrodes for repair and maintenance, referenced the High Court judgments favoring the appellant and allowed the appeal, granting relief.

Eligibility of M.S. Plates, Shapes, Sections, Channels, Plates, HR Plates for Cenvat credit:
The contention here was whether these items, when used for repair and maintenance of existing machinery, are eligible for Cenvat credit. The show cause notice did not allege their use in fabricating supporting structures. The appellant referred to a Rajasthan High Court judgment and a Supreme Court dismissal of a related case, supporting the eligibility of these items for Cenvat credit. The Tribunal, noting the absence of fabrication-related allegations, relied on the legal precedents cited by the appellant to rule in favor of the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with relief for the appellant.

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