2015 (10) TMI 1367 - AT - Central Excise

Admissibility of Cenvat Credit - welding electrodes - repair and maintenance of the machinery - Whether the Cenvat Credit in respect of welding electrodes used for repair and maintenance of machinery is admissible or otherwise - Held that - Assessee could not established ratio of material welding electrodes used for repair and maintenance or otherwise and it is on that fact order was passed therefore ratio of the said judgment cannot be applied. As regard the judgment of Sree Rayalaseema Hi-Strength Hypo Ltd. supra, I observed that in para of the said judgment Hon ble Andhra Pradesh High Court has distinguished the Rajasthan High court judgment in Hindustan Zink Ltd. on the ground it did not pertain to welding electrodes, which is apparently wrong fact. The very judgment is clearly on the issue of availment of Cenvat Credit in respect of welding electrodes used for repair and maintenance of plant and machinery. - judgment of Hon ble Rajasthan High Court in the case of Hindustan Zinc Ltd. Vs. UOI 2008 (7) TMI 55 - HIGH COURT RAJASTHAN and also Suprem Court in UOI Vs. Hindustan Zinc Ltd. 2006 (11) TMI 551 - SUPREME COURT OF INDIA , which was upheld by the Hon ble Apex Court are squarely applicable in the present case and considering the same I am of the view that Cenvat credit in respect of welding electrodes used for repair and maintenance of the machinery in the appellant s factory is admissible - Decided in favour of assessee.

Summary

Issues: Admissibility of Cenvat Credit for welding electrodes used in repair and maintenance of machinery.

Analysis:
1. Legal Position: The appeal questioned the admissibility of Cenvat Credit for welding electrodes utilized in machinery repair and maintenance. The appellant argued that based on various judgments, including the Hindustan Zinc Ltd. case, the credit should be allowed. They referenced precedents like CC & CE Vs. Ace Glass Container Ltd. and others to support their stance.

2. Appellant's Argument: The appellant's counsel contended that the Cenvat credit on welding electrodes for machinery repair is permissible, citing the Hindustan Zinc Ltd. case and other relevant judgments. They emphasized that the welding electrodes in question were indeed used for machinery repair and maintenance, making them eligible for credit.

3. Revenue's Counter: The Revenue representative opposed the appellant's claim, citing conflicting judgments like Kisan Sahkari Chinni Mills Ltd. and others where Cenvat credit for welding electrodes was denied. They presented cases where such credit was disallowed, challenging the appellant's reliance on favorable judgments.

4. Judgment: After evaluating the arguments and reviewing the cited judgments, the tribunal found that the issue of Cenvat Credit for welding electrodes in machinery repair has been extensively debated. Relying on the Hindustan Zinc Ltd. case and its affirmation by the Supreme Court, the tribunal concluded that the credit is admissible if the electrodes are used for repair and maintenance purposes. The tribunal dismissed the Revenue's reliance on conflicting judgments, clarifying that the legal position established by the Hindustan Zinc Ltd. case prevails. Consequently, the tribunal allowed the appeal, affirming the admissibility of Cenvat credit for welding electrodes used in machinery repair and maintenance.