Cenvat credit on maintenance inputs allowed where welding electrodes and similar items were used to repair manufacturing machinery.

Cenvat credit was held admissible on welding electrodes, stainless steel alloy and trash plate used for repair and maintenance of plant and machinery employed in manufacture. The Tribunal preferred the later judicial view recognising that inputs used for such maintenance qualify for credit, and treated the earlier contrary position as no longer controlling. Applying judicial discipline, it followed the precedent allowing credit on similar maintenance items and set aside the denial in favour of the assessee.

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Issues: Whether Cenvat credit was admissible on welding electrodes, stainless steel alloy and trash plate used for repair and maintenance of plant and machinery.

Analysis: The items were used for repair and maintenance of plant and machinery employed in manufacture. The Tribunal preferred the later judicial view that inputs used for such maintenance are eligible for credit. It relied on decisions holding that the earlier contrary view, including the one based on the pre-amendment position, was no longer controlling. Following the principle of judicial discipline, the Tribunal applied the decisions allowing credit on welding electrodes and similar items used for maintenance of machinery.

Conclusion: Cenvat credit on the disputed items was admissible and the denial was set aside in favour of the assessee.

Ratio Decidendi: Inputs used for repair and maintenance of plant and machinery employed in manufacture are eligible for Cenvat credit where later binding precedent has approved such credit.

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