CENVAT credit on repair-and-maintenance gases upheld as eligible inputs under the wider manufacture-linked definition.

Oxygen and acetylene gases used for repair and maintenance of plant and machinery were treated as eligible inputs for CENVAT credit under Rule 2(k) of the CENVAT Credit Rules, 2004. The Tribunal applied the wider input definition, reasoning that items used to maintain machinery deployed in manufacture can qualify as goods used in or in relation to manufacture. Relying on the Madras High Court decision, which in turn followed Jawahar Mills, it accepted that such gases fell within the scope of admissible inputs for credit purposes.

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Issues: Whether oxygen and acetylene gases used for repair and maintenance of plant and machinery were eligible inputs for CENVAT credit under Rule 2(k) of the CENVAT Credit Rules, 2004.

Analysis: The dispute turned on whether goods used for repair and maintenance of machinery employed in manufacture could be treated as inputs used in or in relation to manufacture. The Tribunal relied on the decision of the Madras High Court, which had followed the Supreme Court's ruling in Jawahar Mills and held that such items were covered by the wider input definition for credit purposes. In view of that binding precedent and judicial discipline, the Tribunal accepted that oxygen and acetylene gases used in repair and maintenance of plant and machinery fell within the scope of eligible inputs.

Conclusion: The credit on oxygen and acetylene gases was admissible and the assessee succeeded.

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