Cenvat credit on welding electrodes used for plant repair was upheld under binding High Court precedent.

Welding electrodes used for repair and maintenance of plant and machinery were treated as eligible for Cenvat credit because binding High Court authority had already recognised such use as qualifying both as capital goods and as inputs. The contrary Tribunal view, which was supported only by summary dismissal of an SLP, was not accepted as laying down any law. On that basis, the disallowance of credit on welding electrodes was held unsustainable.

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Issues: Whether welding electrodes used for repair and maintenance of plant and machinery were eligible for Cenvat credit.

Analysis: The issue was held to be covered in favour of the assessee by binding High Court authority, which recognised welding electrodes used for repair and maintenance of plant and machinery as eligible for credit both as capital goods and as inputs. The contrary reliance on a Tribunal decision supported only by summary dismissal of the SLP was not accepted as laying down any law.

Conclusion: The welding electrodes were eligible for Cenvat credit and the disallowance was unsustainable.

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