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2015 (10) TMI 285 - AT - Central ExciseDenial of CENVAT Credit - whether Nitrogen Cylinders and Welding Electrodes used by the appellants in their factory are eligible for Cenvat Credit - Held that - Subject cylinders are used for filling Nitrogen gas which is used in the analytical laboratory as well as the process plant and these cylinders are used for the storage of Nitrogen gas which is utilized for in or in relation to manufacture of finished excisable goods. It is observed that the capital goods are defined to mean inter alia, storage tank used in the factory of the manufacturer of the final products. From the usage of the subject Nitrogen Cylinder, it is clear that they are used for storing the Nitrogen Cylinder and therefore serves the purpose of storage tank. - As regards Welding Electrodes, it has been held that the Welding Electrodes are eligible for Cenvat Credit either as capital goods, or as inputs under Rule 2(g) of Cenvat Credit Rules 2002, by this Hon ble Tribunal the case of Hindustan Zinc Ltd. Vs. Commissioner of Central Excise, Jaipur 2009 (9) TMI 788 - CESTAT NEW DELHI , and the Hon ble High Court of Uttarakhand in the case of Commissioner of Central Excise Vs. ACC Glass containers Ltd. 2013 (10) TMI 194 - UTTARAKHAND HIGH COURT . In view of the same, it is held that the appellants are eligible for Cenvat Credit on welding electrodes. - Decided in favour of assessee.
Issues: Eligibility of Nitrogen Cylinders and Welding Electrodes for Cenvat Credit.
Analysis: 1. Nitrogen Cylinders: The main issue in this appeal was whether Nitrogen Cylinders and Welding Electrodes used by the appellants in their factory are eligible for Cenvat Credit. The appellants claimed Cenvat Credit on Nitrogen Cylinders as capital goods under the category of storage tank, citing Rule 2(a)(vii) of the Cenvat Credit Rules 2004. They also claimed Cenvat Credit on Welding Electrodes as capital goods under Rule 2(a)(iii). The counsel for the appellants argued that these goods were received in the factory, duty paid, and utilized in the manufacturing process of final products, making them eligible for Cenvat Credit. He relied on previous tribunal decisions to support his argument. 2. Nitrogen Cylinders Contention: The Authorized Representative for the respondent contended that Nitrogen Cylinders did not qualify as storage tanks under the inclusive definition of capital goods. He argued against considering Welding Electrodes as capital goods as well, referencing a Supreme Court decision. However, upon examining the records, it was found that the Nitrogen Cylinders were indeed used for storing Nitrogen gas, which was crucial in the manufacturing process of final goods. The tribunal referred to a previous decision to support the eligibility of such cylinders as storage tanks under the definition of capital goods. 3. Welding Electrodes: The tribunal also addressed the eligibility of Welding Electrodes for Cenvat Credit. Relying on previous tribunal and high court decisions, it was held that Welding Electrodes could be considered for Cenvat Credit either as capital goods or as inputs under Rule 2(g) of the Cenvat Credit Rules 2002. The tribunal found in favor of the appellants, stating that they were indeed eligible for Cenvat Credit on Welding Electrodes. 4. Conclusion: In conclusion, the tribunal set aside the order-in-appeal and allowed any consequential relief due to the appellants. The judgment highlighted the eligibility of Nitrogen Cylinders as storage tanks for Cenvat Credit and upheld the eligibility of Welding Electrodes for the same benefit, based on legal precedents and the specific usage of these items in the manufacturing process.
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