2009 (9) TMI 484

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....al authority which was set aside by the Commissioner (Appeals). 1.3 As common issues are involved and appeals arise out of same order, appeals are being disposed of by this common order. 2.1 The learned advocate for the appellants submits that they are manufacturers of chemicals falling under Chapter 28 and they have pipelines in the factory; maintaining the pipelines in proper condition is essentially for the purpose of carrying out the manufacturing activities. They used the welding electrodes in the welding machines which are used in maintaining the pipelines. He submits that the welding machine falls under Chapter subheading 85153910 which is considered as capital goods as per the definition and the welding electrodes being used i....

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....d by the officers and audited by the officers periodically. In fact, they were issued with show cause notice dated 25-2-2002 in pursuance of visit of audit parties. Under these circumstances, the allegation of suppression of relevant materials and invocation of extended period of limitation and imposition of penalty are not warranted. He also submits that the Larger Bench decision in the case of Jaypee Rewa Plant v. CCE, Raipur reported in 2003 (159) l 553 (T - 12) taking note of the differing decisions prevalent, set aside the penalty while holding that welding electrodes are not eligible for Modvat credit. He, therefore, submits that no penalty is warranted in the present case. 3. Learned SDR drawing attention to the finding of the Com....

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....om both sides. The use of welding electrodes is apparently in connection with repair and maintenance of pipelines in the factory of the manufacturers. No doubt the use of welding electrodes is only within the factory of the manufacturer. The welding electrodes are obviously used in the welding machines. However, the Tribunal vide Final Order No. 603/09, dated 24-7-09 [2009 (242) ELI. 545 (TribunaI)] has held that welding electrodes in the case of Vikram Cement in E/A. No. 1466/09 has held that welding electrodes cannot be considered as inputs within the meaning of expression under Cenvat Credit Rules, 2002/2004. Following the said decision I hold that the appellant is not eligible for Cenvat credit on welding electrodes. 5.2 As regards, ....