Cenvat credit for repair materials upheld where plates, coils and strips were used to maintain capital goods, not as structural support.

Cenvat credit was held admissible on plates, coils and strips used for repair and maintenance of capital goods, because they were not used as supporting structures or foundations of machinery. The Tribunal followed earlier decisions and a jurisdictional High Court-backed view that materials used to repair or maintain plant and machinery can qualify for credit, and it rejected the department's attempt to distinguish replacement materials from those used in original manufacture. On that basis, it found the denial of credit unsustainable and held that the assessee had made out a prima facie case for relief against recovery, resulting in stay of the confirmed dues and penalties pending disposal of the appeal.

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Issues: Whether Cenvat credit was admissible on items such as plates, coils and strips used for repair and maintenance of capital goods.

Analysis: The items were not used for supporting structures or foundation of machinery. Reliance was placed on earlier decisions holding that materials used in repair and maintenance of plant and machinery can qualify for credit. The Tribunal noted that the departmental view would create an anomalous distinction between materials used for original manufacture and the same materials used to replace worn-out parts. It followed the jurisdictional High Court-backed view that such items used for repair and maintenance are eligible for Cenvat credit, and held the contrary denial unsustainable. On that basis, the appellant established a prima facie case for relief against recovery.

Conclusion: The issue was decided in favour of the assessee, and recovery of the confirmed dues and penalties was stayed until disposal of the appeal.

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