2017 (1) TMI 1479 - AT - Central Excise

Appeal granted for Cenvat credit on inputs like Asbestos Sheets & Welding Electrodes under Cenvat Credit Rules

The Tribunal allowed the appeal, granting the appellant entitlement to Cenvat credit on items like Asbestos jointing Sheets and Welding Electrodes as ... CENVAT credit - capital goods/inputs - Asbestos jointing Sheets, Welding Electrodes, etc. - Held that: - the appellant is entitled to Cenvat credit on Asbestos jointing Sheets, Welding Electrodes, etc., used in the factory of production for manufacture of excisable goods, as inputs as defined in Section 2(g) of CCR, 2004 - appeal allowed - decided in favor of appellant. Issues:Whether the Cenvat credit availed on items like Asbestos jointing Sheets, Welding Electrodes, etc., during a specific period is allowable as capital goods.Analysis:The appeal revolved around the eligibility of Cenvat credit availed by the appellant, a manufacturer of sugar and molasses, on items such as Asbestos jointing Sheets and Welding Electrodes during a particular period. The Revenue contended that these items did not qualify as capital goods under Rule 2(a)(A)(i) or Rule 2(a)(A)(iii) of the Cenvat Credit Rules, 2004, thus making the credit inadmissible. The appellant, on the other hand, argued that the credit could alternatively be claimed under the definition of 'inputs' in Rule 2(g) of the Cenvat Credit Rules, 2002/2004. However, the ld. Commissioner (Appeals) rejected this claim, stating that input credit was not available either as 'capital goods' or as 'inputs'.The appellant, dissatisfied with the Order-in-Original, approached the Tribunal for relief. During the proceedings, both the appellant and the Revenue cited precedents to support their arguments. The appellant highlighted a case from the Hon'ble Chhattisgarh High Court where credit on Welding Electrodes was allowed as inputs used in the manufacturing process. Additionally, reference was made to a case pending before the Hon'ble Supreme Court and a Larger Bench of the Supreme Court in another matter. The appellant's counsel presented a judgment from the Apex Court, emphasizing the interpretation of the term 'input' in the Cenvat Credit Rules, 2002, beyond the specifically mentioned items. The Apex Court's observation clarified that the term 'include' in the statutory definition is meant to broaden the scope rather than restrict it, citing a relevant precedent.In light of the legal principles elucidated by the Hon'ble Supreme Court, the Tribunal allowed the appeal, granting the appellant the entitlement to Cenvat credit on items like Asbestos jointing Sheets and Welding Electrodes used in the manufacturing process as inputs defined in Section 2(g) of the Cenvat Credit Rules, 2004. Consequently, the impugned order was set aside, and the appellant was deemed eligible for any consequential benefits as per the law. The decision was pronounced in court, providing a favorable outcome for the appellant based on the interpretation of relevant legal provisions and precedents.