2014 (6) TMI 753 - AT - Central Excise

Inconsistent Usage of Cenvat Credit on Welding Electrodes Leads to Rejection

Pratibha Ispat Pvt. Ltd. Versus Commissioner of Central Excise

The appellant availed Cenvat Credit on Welding Electrodes, initially claiming usage for installing capital goods but later asserting usage in ... Waiver of pre deposit - CENVAT Credit - Welding Electrodes have been used for repair and maintenance - Held that:- Appellant’s claim that the MS welding Electrodes were used to fill the holes in MS Ingots is without any supporting evidence. Even as per their statement SS Welding Electrodes are used for making groves in roles. Obviously, this is nothing but maintenance of the roles - contention of appellant at different stages of adjudication and appeal has not been consistent. In view of the said position, appellant have not been able to make out a strong prima facie case - Following decision of Shree Rayalaseema Hi – Strength Hypo Ltd. vs. Commr. Of Cus. & C. Ex., Triupati reported in [2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT] - stay granted partly. Issues Involved:- Availment of Cenvat Credit on Welding Electrodes- Claim of usage for repair and maintenance vs. manufacturing final products- Legal precedents cited by both parties- Consistency of appellant's contentions throughout the caseAvailment of Cenvat Credit on Welding Electrodes:The appellant availed Cenvat Credit on Welding Electrodes, leading to a show cause notice from the department for recovery of the credit. The department contended that the electrodes were used for repair and maintenance, making the credit inadmissible. The appellant initially claimed the electrodes were used for installing capital goods but failed to provide supporting evidence. Subsequently, they submitted an affidavit asserting the electrodes were used in manufacturing final products.Claim of Usage for Repair and Maintenance vs. Manufacturing Final Products:During the proceedings, the appellant's counsel could not definitively prove that the welding electrodes were used for manufacturing final products rather than repair and maintenance. Despite this, the counsel argued that even if used for repairs, Cenvat Credit should be allowed based on legal precedents, including judgments from the Rajasthan and Chattisgarh High Courts. The Additional Commissioner argued that there was no evidence supporting the appellant's claim and cited the latest judgment from the Andhra Pradesh High Court, which discussed relevant Supreme Court and Tribunal decisions.Legal Precedents Cited by Both Parties:The appellant relied on judgments from various High Courts and Tribunals to support their claim for Cenvat Credit, emphasizing decisions favoring credit allowance even for repair and maintenance purposes. In contrast, the Additional Commissioner cited the latest Andhra Pradesh High Court judgment, which aligned with Supreme Court decisions and previous Tribunal rulings, to strengthen the department's stance against granting the credit.Consistency of Appellant's Contentions Throughout the Case:The Member (Technical) noted inconsistencies in the appellant's contentions at different stages of the case, highlighting a lack of a strong prima facie case. Due to this inconsistency and inability to establish a clear usage of welding electrodes for manufacturing final products, the appellant was directed to deposit 25% of the demanded duty within a specified period. The judgment emphasized the importance of consistency in arguments and the need for strong evidence to support claims in such cases.This detailed analysis of the judgment highlights the key issues, arguments, legal precedents, and the final decision regarding the availment of Cenvat Credit on Welding Electrodes, providing a comprehensive overview of the case.