2013 (9) TMI 541 - AT - Central Excise

Court rectifies mistake, grants CENVAT credit for manufacturing electrodes. Upholds decision in favor of applicant.

The court granted rectification of a mistake in the final order, allowing CENVAT credit on electrodes used in manufacturing machinery, distinct from ... Cenvat Credit - Electrodes as welding electrodes – Held that:- Impugned electrodes can well be fitted into chapter sub-heading 8466 as parts suitable for use solely with the machines of heading no.8456 – Held that:- Ectrodes are not usual welding electrodes about which there is dispute whether CENVAT credit could be allowed or not - These electrodes form part of the machinery itself - CENVAT credit allowed on these items – Decided in favor of Assessee. Issues involved:Rectification of mistake in the final order regarding the eligibility of CENVAT credit on electrodes used in the factory.Detailed Analysis:1. Rectification of Mistake in Final Order:The applicant sought rectification of a mistake perceived in the final order issued by the Tribunal, where the appeal by Revenue was allowed concerning the eligibility of CENVAT credit on electrodes used in the factory. The Tribunal initially disallowed the credit, stating that the welding electrodes were used for repair and maintenance of machinery.2. Nature of Electrodes and Usage:The applicant contended that the electrodes in question were not welding electrodes but were used in manufacturing machinery. The description provided during the adjudication stage highlighted the usage of these electrodes in the manufacture of specific machine parts. The manner in which the electrodes were utilized was detailed, indicating their classification under specific chapters of the Central Excise Tariff Act.3. Classification of Electrodes:The applicant argued that the electrodes should be classified under a particular chapter of the Tariff Act, emphasizing their integral role in the manufacturing process of machinery parts. The applicant presented evidence to support the classification of the electrodes as parts suitable for use solely with specific machines, aligning with the interpretative rules mentioned.4. Rectification of Mistaken Facts:It was contended that the Tribunal's decision was based on erroneous facts, as the electrodes were not welding electrodes used for maintenance and repair. These facts were not disputed in higher proceedings, and the Tribunal's reliance on incorrect information led to an erroneous decision that needed rectification.5. Scope of Rectification:The Revenue argued that the application for rectification was beyond scope, citing previous judgments. However, the presiding judge noted that the facts in those cases differed from the present situation, where clear mistakes in findings of fact were evident in the Tribunal's final order, justifying the rectification.6. Decision and Ruling:After considering arguments from both sides, the judge found that the electrodes in question were not standard welding electrodes but integral parts of the machinery. Upholding the lower authorities' decision, the judge allowed CENVAT credit on these items and rejected the Revenue's appeal. The rectification of the impugned order was granted based on the erroneous facts presented.In conclusion, the judgment rectified the mistake in the final order, clarified the nature and usage of the electrodes, and upheld the eligibility of CENVAT credit on the specific items used in the manufacturing process, distinct from standard welding electrodes.