2010 (10) TMI 883 - AT - Central Excise

Tribunal permits Cenvat credit on welding electrodes for maintenance as capital goods. Revenue appeals lack proper authorization.

LH. SUGAR FACTORY LTD. Versus COMMISSIONER OF C. EX., MEERUT-II

LH. SUGAR FACTORY LTD. Versus COMMISSIONER OF C. EX., MEERUT-II - 2011 (272) E.L.T. 275 (Tri. - Del.) Issues:Appeal against denial of Cenvat credit on Welding Electrodes for repair and maintenance of plant and machinery; Appeal against allowing Cenvat credit on Angles, HR Coils, Shapes, Sections, etc.Analysis:1. The assessee, a sugar manufacturer, availed Cenvat credit on welding electrodes for repair and maintenance of plant and machinery, considering them as capital goods. They also availed credit on Steel plates, HR sheets, Section, etc., used for repair of obsolete machinery.2. The adjudicating authority confirmed the demand, imposing penalties. The Commissioner (Appeals) allowed credit on certain items but disallowed it on welding electrodes, leading to appeals before the Tribunal by both parties.3. The assessee's representative cited High Court judgments supporting Cenvat credit on welding electrodes for maintenance. The Revenue argued against it, referring to Supreme Court and Tribunal decisions disallowing such credits.4. The Tribunal noted conflicting decisions and held that post-2000 amendments in Cenvat Credit Rules changed the applicability of earlier judgments. Following judicial discipline, the Tribunal allowed Cenvat credit on welding electrodes for maintenance as capital goods.5. Regarding the proper authorization for Revenue's appeals, the Tribunal found the absence of a valid Committee decision comprising two Commissioners, as required by law. Therefore, the appeals by the Revenue were deemed improper and rejected.6. In conclusion, the Tribunal allowed the assessee's appeals and rejected the Revenue's appeals, based on the entitlement to Cenvat credit on welding electrodes and the lack of proper authorization for the Revenue's appeals.