2009 (1) TMI 722

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..... he period from May, 2005 to October, 2005 the appellants had taken Cenvat credit to the tune of Rs. 1,37,063/- on Aluminum Sheets, Gaskets, Gasket Sheets, Electrodes, Industrial Chains, Emery Cloth, Fibre Jointing Sheet and Tool Bit Blanks etc., used in the manufacture and repair maintenance of Capital goods. The original authority disallowed the credit on the ground that the impugned goods were not used in the manufacturing of capital goods and were used for the purpose of repair maintenance activity. 3. Aggrieved by the order of the Adjudicating Authority, the appellants filed an appeal before the Commissioner (A) and the learned Commissioner (A) after considering the law as laid down by the Tribunal and the Hon ble High Court of Ra .....

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..... eld that items used in repair and maintenance of the machinery are not covered in the scope of Capital Goods . Accordingly he should have followed the same logic and denied Cenvat credit. (iv) Further, the Commissioner (Appeals) should have appreciated the point that in the present case, the items are neither parts nor components to the machinery. They are neither Spares to the Capital Goods. Spare is a part, which is not in the actual use or regular use of a machine at the given moment, but is held or kept as reserve for future use or to meet an emergency. Since the impugned items are used in fabrication for maintenance/repair of the machinery, they cannot be treated as Spares either. Hence, Commissioner (Appeals) has erred in all .....

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..... ntenance of machinery, which are used for manufacture of final product - Such goods which are necessary for running of plant and up-keeping of machinery directly involved in the manufacturing of products, held to be eligible to avail Modvat credit The above cited judgment has the approval of the Hon ble Supreme Court as reported in 2007 (214) E.L.T. A115 (S.C.). Respectfully following the ratio of the above judgments hold that the credit is admissible to the appellants. 6.2 It is seen that the learned Commissioner (A) has relied upon the decision of the Hon ble High Court of Rajasthan, which is squarely covering the issue in favour of the respondent. The decision cited by the learned JCDR is of the Tribunal. It is settled law that the .....

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