Cenvat credit on repair and structural support items is inadmissible when goods are not used in manufacture.

Cenvat credit is not available on welding electrodes, S.S. coil, M.S. angle, M.S. channels and joists when they are used only for repair and maintenance of plant and machinery or as supporting structures in the factory. Applying Rule 2 of the Cenvat Credit Rules, 2002/2004, the analysis treats maintenance and repair as distinct from manufacture and excludes structural items used for support from the scope of eligible inputs. Credit is therefore confined to goods used in or in relation to manufacture as such, and the disputed items fall outside that scope.

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Issues: Whether Cenvat credit was admissible on welding electrodes, S.S. coil, M.S. angle, M.S. channels and joists used in repair and maintenance of plant and machinery or as supporting structures in the factory.

Analysis: The disputed items were examined with reference to Rule 2 of the Cenvat Credit Rules, 2002/2004. M.S. angle, M.S. channels and joists were found to be used as supporting structures of equipment and, following the applicable legal position, such items did not qualify as inputs for Cenvat credit. Welding electrodes were used for repair and maintenance of plant and machinery, and such use was held not to form part of the manufacturing process so as to make the credit admissible. The reasoning adopted in the cited decisions was that maintenance and repair are distinct from manufacture and that structural items used for support are outside the scope of eligible inputs.

Conclusion: Cenvat credit on all the disputed items was held inadmissible and the claim failed.

Ratio Decidendi: Items used only for repair, maintenance or as structural supports of plant and machinery are not eligible inputs for Cenvat credit unless they are used in or in relation to manufacture as such.

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