2010 (4) TMI 424 - HC - Central Excise

Taxpayer allowed cenvat credit for repair and maintenance of plant and machinery under post-2000 amendment to law

COMMISSIONER OF C. EX., BANGALORE-I Versus ALFRED HERBERT (INDIA) LTD.

HC allowed taxpayer's appeal, holding that cenvat credit for repair and maintenance of plant and machinery is permissible where claimed after the 2000 ... Cenvat Credit - input credit for repair and maintenance of plant and machinery - HELD THAT:- Tribunal order benefit assailed submitting that order in case of SAIL vs. Commissioner of Central Excise, Ranchi [2007 (7) TMI 152 - CESTAT, KOLKATA], not allowed credit and that said order already affirmed by Supreme Court. Present case arising after amendment bought in year 2000 which allow Cenvat Credit on such input. Held that- case of SAIL pertained to period prior to amendment. Tribunal justified in allowing appeal of assessee. Issues:- Challenge to legality and correctness of orders passed by CESTAT regarding input credit for repair and maintenance of plant and machinery.Analysis:The High Court heard an appeal challenging the orders passed by the CESTAT regarding the grant of exemption for Cenvat Credit on inputs used for repair and maintenance of plant and machinery. The appellant argued that the tribunal erred in allowing the appeal of the assessee, citing the judgment in SAIL vs. Commissioner of Central Excise, Ranchi, which was affirmed by the Supreme Court. On the other hand, the respondent contended that the SAIL judgment was based on the law existing before an amendment in 2000 and that post-amendment, the assessee could claim Cenvat for such inputs. The respondent referred to a case in Rajasthan where the High Court confirmed the entitlement of the assessee to claim Cenvat for repair and maintenance inputs, which was upheld by the Supreme Court.The High Court held that the tribunal was justified in granting relief to the assessee as the case arose after the 2000 amendment, allowing for Cenvat on repair and maintenance inputs. The Court distinguished the SAIL judgment as pre-amendment and not applicable to the present case. The Court stated that if the matter had arisen before the amendment, they would have sided with the revenue. Consequently, the appeal was dismissed, with the questions of law answered against the revenue in favor of the assessee.This detailed analysis showcases the legal arguments presented by both parties, the interpretation of relevant judgments, and the High Court's reasoning for dismissing the appeal and upholding the decision of the tribunal.