2023 (12) TMI 1237 - AT - Central Excise

Tribunal Grants Cenvat Credit for Maintenance Tools, Citing High Court Precedents on Essential Repair Inputs.

M/s. Supershakti Metaliks Pvt. Ltd. Formerly known as Super Smelters Ltd. Versus Commissioner of CGST & Central Excise, Bolpur

The Appellant was granted relief by the tribunal, allowing the Cenvat Credit for wielding electrodes used in repairs and maintenance within the factory ... CENVAT Credit - inputs or not - wielding electrodes used in their factory premises towards repairs and maintenance activities - HELD THAT:- The Rajasthan High Court in the case of HINDUSTAN ZINC LTD. VERSUS UNION OF INDIA [2008 (7) TMI 55 - RAJASTHAN HIGH COURT] has held the expression “in the manufacture of goods” should normally encompass entire process carried on by the dealer, of converting raw materials into finished goods, where any particular process, or activity, is so integrally connected with the ultimate production of the goods, but for that process, manufacturing, or processing of the goods would be commercially inexpedient, goods required in that process would, fall within expression “in the manufacturing of goods”. The Chhattisgarh High Court in the case of CST, Bilaspur Vs. Singhal Enterprises Pvt. Ltd. [2017 (7) TMI 1112 - CHHATTISGARH HIGH COURT] has held Welding Electrodes used in the manufacturing process are considered as inputs. Since the present issue is squarely covered by the above decisions of the Hon’ble High Court, respectfully following them, the present Appeal is allowed. Issues involved: Denial of Cenvat Credit for wielding electrodes used in factory premises towards repairs and maintenance activities.Summary:The Appellant was aggrieved by the denial of Cenvat Credit amounting to Rs.15,838/- for wielding electrodes used in their factory premises for repairs and maintenance activities. The Appellant relied on the case law of Panipat Co-operative Sugar Mills Ltd. Vs Commissioner of Central Excise, Rohtak, emphasizing that repair and maintenance activities are essential for smooth manufacturing operations, making goods used for such activities eligible for Cenvat Credit. The Learned Authorized Representative reiterated the findings of the Lower Authorities.The judgment of the Rajasthan High Court in Hindustan Zinc Ltd. Vs. UOI was referenced, highlighting the interpretation that goods used in the manufacturing process should be considered as inputs, even if they are not directly involved in the manufacturing process but are integral for the production of goods. Similarly, the Chhattisgarh High Court and Uttarakhand High Court decisions supported the view that wielding electrodes used in the manufacturing process are considered as inputs, falling within the definition provided by the relevant Rules.Given that the present issue was in line with the decisions of the High Courts, the Appeal was allowed, and the Appellant was granted relief.