2017 (5) TMI 629 - AT - Central Excise

CENVAT credit - welding electrodes - whether respondent is eligible to avail CENVAT credit on the Central Excise duty paid on welding electrodes which is consumed in the respondent s factory exclusively use for repair and maintenance of machinery? - Held that - identical issue decided in the case of SREE RAYALASEEMA HI-STRENGTH HYPO LTD. Versus COMMR. OF CUS. & C. EX., TIRUPATI 2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT , where it was held that Once the assessee availed credit u/r 2(k) of the Rules of 2004 without entitlement it amounts to contravention of the rule with the intention of evading payment - the appellant is eligible for Cenvat Credit on the impugned goods - the first appellate authority has followed the judicial discipline by following order of this Tribunal in respect of the identical issues that also in respect of same assessee - appeal dismissed - decided against Revenue.

Summary

Issues involved: Eligibility of the respondent for CENVAT credit on Central Excise duty paid on welding electrodes used for repair and maintenance of machinery.

Analysis:
The appeal was filed by the Revenue against an Order in Appeal, where the respondent did not appear. The issue at hand was whether the respondent could avail CENVAT credit on Central Excise duty paid on welding electrodes used exclusively for repair and maintenance of machinery in their factory. The first appellate authority had set aside the Order-in-Original, confirmed demands with interest, and imposed a penalty. However, the authority relied on previous Tribunal orders and judicial discipline to rule in favor of the respondent. The authority noted that a similar issue had been addressed in a past case involving the same appellant, where it was held that manufacturing operations were not commercially feasible without regular repair and maintenance of machinery using welding electrodes. Following this precedent, the authority concluded that the appellant was eligible for CENVAT credit on the impugned goods, and as a result, the demand, interest, and penalty were not sustainable. The Tribunal upheld the first appellate authority's decision, citing adherence to judicial discipline and the precedent set by previous Tribunal orders. Consequently, the appeal was rejected, and the order was dictated and pronounced in open court.