2015 (10) TMI 2526

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....cturer of sugar and molasses. The appellant is in appeal against denial of Cenvat credit on certain goods being welding electrodes, channels, hot strip mill plate, angles, MS plate, TMT bars, GCGSC sheet et cetera. A show cause notice dated 24/9/09 was issued as it appeared to revenue on scrutiny of records that the Cenvat credit taken on the aforementioned items for the period September 2008 to April 2009 is improper as the items do not fall in the definition of capital goods. Prior to issue of show-cause notice, the appellant on some of the items like girder, hot strip mill plate, TMT, GCGSC sheet, which were used in civil work, the credit was reversed amounting to Rs. 1,53,358/-. Further it appeared that on the other items as listed ther....

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....he impugned order the ld. Commissioner (Appeals) was pleased to uphold the disallowance of Cenvat credit but at the same time was pleased to set aside the penalty imposed. The ld. Commissioner (Appeals) observed that the contention of the appellant that number of iron & steel items, welding electrodes have been used as inputs for the maintenance of capital goods within the factory, but the appellant have failed to substantiate that the goods in question have actually been used for the fabrication of some capital goods within the factory which in turn have been used for manufacture of the final products. Further use of goods in question for maintenance of the capital goods has been specifically admitted by the appellant. 4. Being aggrieved ....

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....envat credit. For deciding eligibility of an input for Cenvat credit, what is relevant is whether the activity in which the input is used has nexus with the manufacture of final product and the nexus has to be determined on the criteria as to whether that activity, is essential for the manufacture of the final products. The ld. Counsel also placed reliance on the ruling of another Bench in the case of Hindustan Petroleum Corporation Ltd. Vs. CCE, C and ST, Visakhapatnam, where it was held that H.R.Sheets and Steel, plates, et cetera used for repair and maintenance of storage tank within the factory, would be eligible for credit. Further when inputs were used in the repair and maintenance of storage tank which is capital goods, under the def....