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TMI Blog2015 (11) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (5) TMI 44 - HIGH COURT RAJASTHAN ) which has been affirmed by the Hon’ble Supreme Court which also considers similar set of facts and therefore is applicable to the issue - Decided against Revenue. - E/395/2008-SM - Final Order No. 20106 / 2015 - Dated:- 19-1-2015 - Mr. B.S.V. Murthy, Technical Member For the Petitioner : Mr. R. Gurunathan, AR For the Respondent : Mr. K.S. Ravi Shankar Mr. N. Anand, Advocates ORDER Per : B.S.V. MURTHY Vide Final Order No. 27062-27063/2013 dated 03.12.2013, this Tribunal had allowed the appeal filed by the appellant. The issue involved was whether the appellant was eligible for cenvat credit of duty paid on MS sheets, angles, plates, beams etc. According to the appellant, if they are able to show that MS sheets, plates etc. have been used in the factory in repair and maintenance of the machinery that would be sufficient. The appellants also had relied upon two decisions of this Tribunal which were taken on the basis of certain precedent decisions of various High Courts, while passing a fevourable order to the assessee. While considering the decisions of the Tribunal which had relied upon the several decisions of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and therefore credit is not available. He drew my attention to the paragraph 6 of the decision which is reproduced below for better appreciation. 6. Dealing with the corresponding definition of input in Rule 2(g) of the Rules of 2002, the Supreme Court in M/s. Maruti Suzuki Ltd. held that the crucial requirement is that the goods must be used in or in relation to the manufacture of the final product to qualify as an input and that this presupposes that the element of manufacture must be present. The second explanation to the definition in Rule 2(k) makes it clear that only goods used in manufacture of capital goods which are further used in the factory of the manufacturer would qualify as input. Though the assessee used the terms manufacture, repair and maintenance interchangeably in its reply, it is manifest that manufacture and repair/maintenance are not the same and cannot be equated. Goods used for repair or maintenance of the machinery are not constituents in its actual manufacture and therefore would not qualify under the second explanation to the definition. 3.1. He submits that even though the Hon ble High Court was considering only welding electrodes in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy taken by this Tribunal. He submits that the very same issue had come up before the Honble High Court of Andhra Pradesh in the case of Rashtriya Ispat Nigam Ltd. [2011 (271) E.L.T. 338 (A.P)] and Hon ble High Court s observation in paragraphs 3 4 which according to him supports their case. He also submits that in Rashtriya Ispat Nigam Ltd. the Hon ble High Court was considering the issue of eligibility of MS sheets, plates etc. and therefore the facts in that case are exactly similar to the present case before the Tribunal. On the other hand if the facts in the case of Sree Royalaseema Hi-Strength Hypo Ltd. are examined, it would show that what was under consideration by the Hon ble High Court was the issue as to whether credit is available on welding electrodes used for repair and maintenance in the factory as an input. He draws my attention to paragraph 5 6 of the decision to submit that in that case what was under consideration was input and electrodes whereas the issue under consideration before this Tribunal and before the Hon ble High Court of Andhra Pradesh in Rashtriya Ispat Nigam Ltd. case were entirely different. In Rashtriya Ispat Nigam Ltd. case, the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 4.4. It was also submitted that the Tribunal while interpreting a law which is applicable all over India and a Tribunal has a jurisdiction of more than one State and have the liberty to follow a decision which has framed in its jurisdiction in case there are contrary views, I am unable to agree with this submission and therefore I do not propose to do at all. In my opinion, the Tribunal is required to follow the jurisdictional High Court decision and issue which has arisen within the jurisdiction of that High Court even though there are other High Courts. I am examining the correctness of this submission since I believe that judicial discipline would mean that this has to be followed without thinking of the consequences. The consequences should not come in the way of following correct legal position. 4.5. The learned counsel also relied upon the decision in the case of CCE, Coimbatore Vs. Jawahar Mills Ltd. [2001 (132) E.L.T. 3 (S.C)] to support the case that if the capital goods are used in the factory, that is a sufficient fulfillment of the obligation and once it has been shown that appellants have used the material in the factory, credit would be available. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l goods, alternative claim is made that the same can be considered as inputs. The learned counsel pointed out that Hon ble Supreme Court in the case of Marsons Fan Industries Vs. CCE, Calcutta [2008 (225) E.L.T. 334 (S.C)] and in the case of CCE, Hyderabad Vs. Novapan Industries Ltd. [2007 (209) E.L.T. 161 (S.C)] held that department has to follow precedent decision and once the principles laid down are accepted, the department cannot be permitted to open the case again. 7. I have considered the submissions made by both the sides. In fact it would have been sufficient if I have to consider only one issue which in my opinion and also as submitted by the learned counsel for the respondent in this case would have fulfilled the requirements laid down by the Hon ble High Court while remanding the matter. However several submissions were made by both the sides and some of them, which I feel are relevant in my opinion would be worth considering the same rather than ignoring them especially if they lead to further litigation. 8. As regards applicability of the decision of the Hon ble High Court in the case of Sree Royalaseema Hi-Strength Hypo Ltd., (supra), as submitted by the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k) of the Rules of 2004 defines input as hereunder : (k) input means - (i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or stem used in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. Explanation-1 . The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation-2 . Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; 6. Dealing with the correspondi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. While passing the order the observations of the Tribunal in the case of Panipat Cooperative Sugar Mills Ltd. in paragraph 5 was simply reproduced. The Tribunal in that case had observed in my view when three High Courts as mentioned above held that the items used for repair and maintenance of plant and machinery are eligible for cenvat credit it is this view which has to be adopted was reproduced. Unfortunately while doing so, the fact that the decision in the case of Sree Rayalaseema Hi-strength Hypo Ltd. was rendered by the jurisdictional High Court was omitted to be noticed and unfortunately there were no interruption by either side during the course of adjudication and as a result the mistake slipped in. However the discussion above would clearly show that the decision in the case of Sree Rayalaseema Hi-strength Hypo Ltd. relating to welding electrodes as an inputs whereas the issue under consideration before this Tribunal is relating to the definition of capital goods and the use. Moreover even the original adjudicating authority also has proceeded on the ground that the earlier decisions are not applicable since in those cases the items were treated as inputs and now ..... X X X X Extracts X X X X X X X X Extracts X X X X
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