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of <h1>Welding electrodes and gases for repairs not eligible for Cenvat credit under Rules 57AB/57AC; appeal dismissed</h1> CEGAT held that welding electrodes and gases used solely for repairs and maintenance were not capital goods or inputs used in the manufacture of final ... Cenvat/Modvat - Welding Electrodes and Gases (Oxygen & dissolved Acetylene) used for repairs and maintenance of machinery - capital goods for captive consumption - admissible under Rule 57AA - HELD THAT:- No evidence on record to show that any part of the Welding electrodes and gases was used in the manufacture of any capital goods for captive consumption. The entire quantity of Welding electrodes and gases will be held to have been used only for repairs and maintenance of plant and machinery. The Welding electrodes and gases used by the appellants for repairs and maintenance of machinery cannot be considered to have been used 'in relation to the manufacture of final products' as they were not used co-extensively with the process of manufacture of cement/clinker and hence not integrally connected with the manufacture. We, therefore, hold that the Welding electrodes and gases used for repairs and maintenance of machinery in the appellants' factory during April-September, 2000 were not eligible inputs for Cenvat credit under Rules 57AB and 57AC. Having answered the referred issue in favour of the Revenue, we affirm the Commissioner's order in relation to Cenvat credit on Welding electrodes and gases for the period April to September, 2000 and reject the appeal on merits. Issues involved: Whether Cenvat credit was admissible u/r 57AA of the Central Excise Rules, 1944 to Welding Electrodes and Gases used for repairs and maintenance of machinery.Summary:1. The issue pertains to the admissibility of Cenvat credit under Rule 57AA of the Central Excise Rules, 1944 to Welding Electrodes and Gases used for repairs and maintenance of machinery. Conflicting decisions by different benches were noted, with one denying credit and another allowing it based on the usage of the items in relation to the final product manufacturing process.2. The appellant argued for the credit citing relevant circulars and judicial precedents supporting the eligibility of Welding electrodes and gases as inputs under Rule 57AA. The Departmental Representative defended the denial of credit based on previous tribunal decisions and interpretations of the term 'manufacture of final product.'3. The Commissioner followed previous decisions to deny Cenvat credit to the appellants for Welding electrodes and gases. The arguments revolved around whether the items were used directly in the manufacturing process or only for repairs and maintenance, with references to legal interpretations and tribunal decisions.4. The show cause notice alleged that the Welding electrodes and gases were not used in or in relation to the manufacture of final products, leading to the denial of input credit. The definition of 'input' under Rule 57AA was examined, and the party's claim of treating the items as inputs was considered.5. The party claimed that a portion of the Welding electrodes and gases were used in the manufacture of capital goods for captive consumption, but failed to provide evidence supporting this claim. The Commissioner rejected this plea, finding no proof of usage for capital goods manufacturing.6. The debate centered on whether the Welding electrodes and gases used for repairs and maintenance qualified as eligible inputs for Cenvat credit. The tribunal analyzed the term 'used in or in relation to the manufacture of final products' and concluded that the items did not meet the criteria based on legal interpretations and precedents.7. The tribunal distinguished the case of Birla Jute & Industries and the Board's circular, emphasizing that the Welding electrodes and gases were not used for repairs and maintenance of capital goods, thus not meeting the criteria for credit eligibility.8. The tribunal affirmed the Commissioner's decision to deny Cenvat credit on Welding electrodes and gases but set aside the imposed penalty. The appeal was rejected based on the findings related to the usage of the items for repairs and maintenance rather than direct manufacturing processes.
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