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of <h1>Tribunal allows Cenvat credit for repair & maintenance; crucial ruling for businesses</h1> <h3>M/s. CHEMFAB ALKALIS LTD. Versus COMMISSIONER OF GST &CE, PUDUCHERRY</h3> M/s. CHEMFAB ALKALIS LTD. Versus COMMISSIONER OF GST &CE, PUDUCHERRY - TMI Issues: Eligibility of Cenvat credit on specific items used for repair and maintenance of capital goods.Analysis:1. The appellant availed Cenvat credit on certain items like MS Channels, MS Angles, CR Coils, HR Plates, and MS Plates for the period Apr.’06 to Mar.’10. The department contended that these items were not eligible for capital goods credit, leading to a show-cause notice for recovery of wrongly availed credit, interest, and penalties.2. The appellant argued that the impugned goods were used for repair and maintenance of capital goods, not as support structures. The appellant emphasized that pollution control equipment falls under the definition of capital goods and cited relevant case law to support their claim. The appellant provided detailed worksheets during remand proceedings to demonstrate the usage of the impugned goods for repair and maintenance purposes.3. The appellant relied on the decision in the case of Commissioner of Central Excise, Jaipur Vs M/s. Rajasthan Spinning and Weaving Mills Ltd., which established the user test for capital goods. They also referenced the case of M/s. India Cements Ltd., Vs CESTAT, Chennai, where credit on similar items was deemed eligible when used for erecting capital goods to stabilize them.4. The Tribunal noted that the impugned goods were indeed used for repair and maintenance of capital goods, as evidenced by the detailed worksheets provided by the appellant. Despite the lack of verification by the department during the remand proceedings, it was established that the goods were not used for support structures but for essential repair and maintenance purposes.5. Citing precedents like the case of M/s. Rajasthan Spinning and Weaving Mills Ltd. and M/s. India Cements Ltd., the Tribunal concluded that when items like MS Angles and MS Channels are used for erecting capital goods necessary for manufacturing activities, the credit should be deemed eligible. Therefore, the disallowance of credit on the impugned goods was deemed unjustified, and the appeal was allowed with consequential reliefs, if any.This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal principles applied, and the final decision rendered by the Tribunal regarding the eligibility of Cenvat credit on specific items used for repair and maintenance of capital goods.
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