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TMI Blog2024 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... edit Rules, 2004, and wrongly allowing Cenvat Credit on goods such as "Welding Electrodes," "Welding filler Wires," "Wire FLR," "Welding Wire," "Wire Rope," and "M.S. Gratings/G.I. Coated Gratings," which do not fall within the specified categories? B. Whether the Hon'ble CESTAT overlooked the clear provisions of Rule 2(k) of the Cenvat Credit Rules, 2004, while allowing Cenvat Credit on goods like "Welding Electrodes," "Welding filler Wires," etc., which were used for repair and maintenance of Plant & Machinery, and not in the direct manufacturing process, as required by the definition of 'inputs' and resultantly CENVAT Credit on such goods cannot be allowed? C. Whether the Hon'ble CESTAT incorrectly relied on judgments that are not final and have been challenged at higher forums, thereby disregarding the principle of judicial discipline and creating an erroneous precedent? D. Whether the Hon'ble Tribunal erred in setting aside the order of the Adjudicating Authority, confirming the demand for the recovery of wrongly availed Cenvat Credit of Rs. 1,56,73,968/-, and not considering the fact that the said goods were not entitled to be treated as 'Capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 228) E.L.T. 517 (Raj.) and M/s. ITC Ltd. Vs. CCE, 2008-TIOL-117-CESTAT BANG of Banglore Tribunal and M/S. Manikgarh Cements V. CCE, 2008 TIOL-43-CESTAT-MUM were also distinguished and it was held by the Adjudicating Authority that the above welding electrodes, wire FLR, filler wires, welding wire and wire rope used for repairs and maintenance of plant and machinery in the factory of the assessee during the period under question were not eligible inputs for Cenvat credit. It was also submitted by learned advocate Ms. Sancheti that the Adjudicating Authority has categorically held on facts that there is no evidence on record to show that any part of such inputs were used in the manufacture of any capital goods for captive consumption. 8. With regard to the Cenvat Credit M/S. Gratings it was submitted that the Adjudicating Authority has applied the "user test" and in the facts of the case, it was held that such Ms. Gratings can not be considered as part of the capital goods installed in the factory premises of the respondent and therefore the same would not fall within the ambit of the capital goods as contemplated in Rule 2(a)(A) of the Cenvat Credit Rules, 2004. 9. In support of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this controversy in the above definition of "input", the Legislature has clarified that even if an item is not contained in the final product still it would be classifiable as an "input" under the above definition. In other words, it has been clarified by the definition of "input" that the following considerations will not be relevant: (a) use of input in the manufacturing process be it direct or indirect; (b) even if the input is not contained in the final product, it would still be covered by the definition. These considerations have been made irrelevant by the use of the expression "goods used in or in relation to the manufacture of final product" which, as stated above, is the crucial requirement of the definition of "input". Moreover, the said expression, viz, "used in or in relation to the manufacture of the final product" in the specific/substantive part of the definition is so wide that it would cover innumerable items as "input" and to avoid such contingency the Legislature has incorporated the inclusive part after the substantive part qualified by the place of use. For example, one of the categories mentioned in the inclusive part is "used as packing material". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being "used in or in relation to the manufacture" stands complied with. In our view, one has to therefore read the definition in its entirety." 11. Reliance was also placed on the admission of the SLP in case of M/s. Hindustan Zinc Ltd. (Supra) and Vandana Global Limited as the Rajasthan High Court and Jharkhand High Court respectively held in favour of the assessee for entitlement of the Cenvat credit on similar products. 12. On the other hand, learned advocate Mr. Vishal Agrawal for the respondent assessee submitted that the issue is no more res integra in view of the decision of the Hon'ble Apex Court in Civil Appeal No. 4704 of 2007 in case of the Kisan Co-operative Sugar Factory Ltd. Vs. Commissioner, Central Excise, Meerut-I, wherein about forty appeals were disposed of by the Hon'ble Supreme Court in the similar issue and it was submitted that Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on the M/s. Gratings/G.I. Coated Gratings are concerned, the Tribunal has relied upon the decision of the appellants own case and quoted the same as under: "4. We have heard both the sides and perused the record. We find that all the items were used exclusively in relation to manufacture of final product in the appellants manufacturing unit. The welding electrode and welding filler wire were used for repair and maintenance of plant and machinery which is necessity to run the production of excisable goods. Therefore, the same is used even if not directly but indirectly indeed in relation to manufacture of final product. As regard material used for railway line the only ground for denial of credit by the adjudicating authority is that the railway line is located outside the factory premises. In the present case railway line installed partly within the factory and outside the factory is exclusively used for handing of material which is used in the manufacture of final product. We, following the judgment of Hon'ble Supreme Court in the case of Vikram Cement V. Commissioner-2006 (197) E.L.T. 145 (S.C.), are of the view that credit on material used for laying rail line is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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