2015 (10) TMI 2273 - AT - Central Excise

Tribunal allows appeal, grants credit on welding electrodes, emphasizes maintenance in manufacturing.

The Tribunal allowed the appeal, setting aside the disallowance of credit on welding electrodes and gas by the department. The Tribunal held that the ... Denial of CENVAT Credit - Welding electrodes - Held that:- issue is no longer res-integra and the Tribunal in Bajaj Hindustan Ltd. case (2013 (11) TMI 981 - CESTAT NEW DELHI) has discussed the judgements of various High Courts on the issue - The judgement laid in Sree Rayalaseema H-Strength Hypo Ltd. (2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT) relied by Revenue is distinguished in the said judgement. Applying the ratio laid in the above judgement in Bajaj Hindustan Ltd. case, I hold that denial of credit on welding electrodes and gas is unjustified. - Decided in favour of assessee. Issues: Whether credit is admissible on welding electrodes.Analysis:1. Factual Background: The appellant, engaged in manufacturing refractory materials, availed credit on welding electrodes and gas, which was challenged by the department leading to disallowance of credit, recovery with interest, and penalty imposition.2. Contentions: The appellant argued that welding electrodes were used for repair of plant and machinery essential for manufacturing final products, thus qualifying as inputs. The appellant cited relevant judgments to support their claim.3. Department's Argument: The department contended that welding electrodes were treated as capital goods, hence inadmissible for credit. They relied on a specific judgment to support their position.4. Tribunal's Analysis: After hearing both sides, the Tribunal referred to previous judgments by various High Courts on the issue. The Tribunal emphasized the importance of repair and maintenance in manufacturing activities, citing relevant legal interpretations.5. Precedent: The Tribunal distinguished a judgment relied upon by the department and applied the ratio from a previous case to hold that denial of credit on welding electrodes and gas was unjustified.6. Decision: Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed with consequential relief, as pronounced in the open court by the Member (Judicial) Sulekha Beevi C.S.