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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 ..... here was a observation in the order that there are decisions of three High Courts taking a view that the benefit of cenvat credit would be available in such a situation and there was only one decision which was relied upon by the learned AR. Taking note of the fact that there were two Tribunal decisions and there were three High Court decision taking a view in favour of the appellants and only one decision of the Hon'ble High Court of Andhra Pradesh relied upon by the Revenue, this order was passed. 2. This decision was challenged before the Hon'ble High Court and the Hon'ble High Court remanded the matter for fresh consideration with the following observation after framing the question of law. For better appreciation, the relevant portion of the decision of the Hon'ble High Court is reproduced below: "This appeal is admitted on the following substantial question of law. "Whether the learned Tribunal has committed any quasi judicial indiscipline by not following the judgment of the jurisdictional High Court and in following the judgment of the learned Tribunal, which was rendered while relying on the judgment of the Karnataka High Court and various other High Courts?" We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of this case also since the principle laid down therein is that whether it is inputs or capital goods if they are used for repairs and maintenance, credit is not admissible. He also submits that the Hon'ble High Court clearly observed that manufacture and maintenance and repair cannot be interchangeably used. 3.2. He also draws my attention to paragraph 7 which according to him supports the case of the Revenue. In this paragraph Hon'ble High Court took note of the fact that the decision of the Tribunal in the case of SAIL V. CCE [2008 (229) E.L.T. A127] came to be affirmed by the Hon'ble Supreme Court and in that case also it was held that cenvat credit of duty paid on welding electrodes is not admissible. 3.3. Further he also submits as an alternative submission that, the appellants have not been able to show as to where exactly these sheets, angles and plates have been used and how they have been used. He draws my attention to paragraph 3.3 of the grounds of appeal wherein it has been stated that the items on which credit has been taken by the appellant would have been used are general purpose structural items having multifarious use and being not components, parts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 2(b) and recorded the fining in paragraph 4 and in the case of Sree Royalaseema Hi-Strength Hypo Ltd., the Hon'ble High Court had examined Rule 2(k) of the CENVAT Credit Rules which defines inputs. Therefore the findings recorded by the Honble High Court of Andhra Pradesh in the case of Sree Royalaseema Hi-Strength Hypo Ltd., cannot be applied since the whole decision was considering as to whether items in question there would be considered as inputs or not. 4.1 Further the learned counsel also draws my attention to the decision in the case of CCE, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (255) E.L.T. 481 (S.C)] that if the user test is applied and after applying such a test, Hon'ble Supreme Court had come to the conclusion that credit would be admissible in respect of steel plates and MS channels etc. The learned AR submitted that this decision cannot be applied to the present case since Hon'ble Supreme Court was considering as to whether MS channels, plates, sheets etc. used in chimney which is a specified part of plant and machinery credit can be allowed or not and that decision cannot be applied generally to all circumstances. 4.2. Learned counsel al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order as well as memorandum of appeal that this fact has not been contradicted and has been accepted throughout. 5. Even though the matter was heard and order was dictated in the Court in this case, unfortunately the fact that there were two earlier decision of the Tribunal on the very same issue in favour of the assessee was not brought to the notice of the Tribunal by the assessee probably on the assumption that there were three High Court decisions which supported the view that credit is admissible. Today the matter was pressed and it was pointed out that even in the impugned order, the learned Commissioner (Appeals) has clearly observed that there are orders of the Tribunal on the very same issue and said orders have attained finality against the same has not been challenged. Further the Commissioner also has considered the facts of the case and applied the decision of the Tribunal and therefore it was submitted that the action taken by the Revenue amounts to action contrary to the theory of doctrine of legitimate expectations. Since the issue had already come up on two occasions and decided in favour of the assesee under the same set of facts and circumstances without any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of Andhra Pradesh had taken a view in favour of the assesee in this case. For better appreciation paragraphs 3 & 4 of the decision in the case of Rashtriya Ispat Nigam Ltd., and paragraphs 5 & 6 in the case of Sree Royalaseema Hi-Strength Hypo Ltd., are reproduced. "3. Rule 2(b) of the CENVAT Rules has been extracted in the appellate order of the Commissioner (Appeals) dated 24-3-2005, and it reads as under. Rule 2(b) capital goods means,- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Tariff Act; (ii) components, spares and accessories of the goods specified at (i) above; (iii) moulds and dies;used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office. 4. It is evident therefrom that capital goods would not only include goods falling under Chapters 82, 84, 85 and 90 of the Central Excise Tariff Act but also components, spares and accessories of such goods, and moulds and dies which are used in the factory of the manufacturer of the final product, but not equipment or appliance used in an offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." The reproduction would clearly show that the Rules under consideration in both the decisions were totally different. In the case of Sree Royalaseema Hi-Strength Hypo Ltd., Hon'ble High Court was considering the definition of 'inputs' whereas in the case of Rashtriya Ispat Nigam Ltd. the definition of 'capital goods' was being considered. In my opinion this would show that the decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts or capital goods was not the question before the Tribunal also. The Tribunal was only considering whether the denial of credit taking a view that these are not inputs is proper or not. Therefore that issue has to be left without discussion and what is relevant to be considered is that in this case the issue under consideration is capital goods and treating this item as capital goods, the decisions rendered have to be considered. All the three decisions relied upon by the Tribunal in the case of Kisan Sahkari Chini Mills Ltd., Panipat Cooperative Sugar Mills Ltd. and in the case of Hindustan Zinc Ltd., the Hon'ble High Court had considered the availability of cenvat credit of duty paid on MS bars/SS plates used in workshop as capital goods and this decision has been upheld by the Hon'ble Supreme Court also. Hon'ble High Court while remanding the matter has clearly observed that in case there are any other decisions which are applicable to the facts of this case such decisions can be followed. The Hon'ble High Court had clearly observed that while conducting the rehearing, this Tribunal should take note of the judgment of the jurisdictional High Court and other judgments if any r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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