2017 (6) TMI 1102

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....n appeal No. E/1381/2004 are taken. Briefly the facts of the case are that the appellants are engaged in the manufacture of clinker and cement falling under Chapter 25. They have availed credit of Rs. 18,07,940/- on different types of inputs such as chemicals, steel items, lubricants, greases, nuts and bolts, electrodes and DA gas, oxygen, etc., during various months in the year 1996-97 and 1998 and have availed MODVAT credit on these items. Thereafter, show-cause notices were issued proposing to deny the said credit on these inputs. The Assistant Commissioner vide the Order-in-Original dated 7.6.1999 allowed MODVAT credit for Rs. 3,55,150/- on hydrochloric acid, oxygen, caustic soda, and dissolved acetylene gas and disallowed credit on other inputs. Aggrieved by the said order, appellant filed appeal before the Commissioner (A) and the Commissioner (A) vide order dated 14.12.2001 set aside the Order-in-Original and allowed the appeal. Against the Order-in-Appeal, the Revenue filed appeal before the CESTAT and CESTAT remanded the case back to the Commissioner (A) for decision after examining the use of each item and thereafter the Commissioner (A) has passed the impugned order and ....

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.... 4.1 He further submitted that the issue of availability of CENVAT credit on welding electrodes utilised for the purpose of repair and maintenance is decided by the Hon'ble Supreme Court in the case of Ramala Sahkari Chini Mills Vs. CCE, Meerut reported in 2010-TIOL-102-SC-CX wherein the apex court referred the matter to the Larger Bench. Further, the Larger Bench as reported in 2016-TIOL-20-SC-CS-LB held that the term include in the statutory definition of inputs is generally used to enlarge the meaning of the preceding words and it is by way of extension and not with restriction. They also submitted that after the decision of the Larger Bench of Supreme Court, various Benches of the Tribunal has allowed CENVAT credit on welding electrodes as inputs and for this submission, he relied upon the following decisions: • M/s. Steel Authority India Pvt. Ltd. Vs. CCE, Raipur: 2017-TIOL-1883-CESTAT-DEL. • M/s. GR Sponge and Power Ltd. Vs. CCE, Raipur: 2017-TIOL-1004-CESTAT-DEL. • Neoli Sugar Factory Vs. CCE, Agra: 2017-TIOL-638-CESTAT-ALL. • M/s. India Cement Ltd. Vs. CCE, Hyderabad: 2016-TIOL-2423-CESTAT-HYD. • M/s. Orient C....

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....rein the Hon'ble Karnataka High Court has framed a substantial question of law as to Whether the Tribunal is correct in holding that the CENVAT credit availed on the value of welding electrodes used for repair and maintenance of equipments in the course of manufacture of product by the respondent is an input in the production of excisable goods and therefore, the assessee was entitled to claim CENVAT credit on the value of welding electrodes. Thereafter, the Hon'ble High Court after considering the submissions of the counsel for the Revenue and also various other decisions on the issue has answered the substantial question of law in favour of the assessee by holding that the manufacturer/assessee is entitled to CENVAT credit of the value of welding electrodes used for repair and maintenance of equipments in the manufacture of product as an 'input'. Here it is pertinent to reproduce para 4 and 5 of judgment of the Hon'ble High Court of Karnataka. "4. Therefore, the short question is. while welding electrodes could be construed as an 'input' in the manufacture of cement in this case. In order to decide this issue, it is necessary to see the definition of &#39....

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....ibution of power need not, to qualify for special treatment under S.8 (1), be ingredients or commodities used in the processes, nor must they be directly and actually needed for "turning out or the creation of goods". In the aforesaid judgment, the Hon'ble Supreme Court went to the extent of holding that in a factory manufacturing cotton, certain electrical equipments would be commercially necessary; for instance, without electrical lighting, it would be difficult to carry on business, and the same was held to be an 'input' in the 'manufacture of goods'. Thus, all commodities used in the creation of goods would be 'inputs' and the definition in the Rules is quite exhaustive. 5. Probably keeping in mind this interpretation of the Apex court, the definition of input' is enacted, i.e. used in or in relation to manufacture of final products whether directly or indirectly and whether contained in the final product or not' The Rajasthan High Court had an occasion to consider a similar pcin in the case of HINDUSTAN ZINC LTD Vs. UNION OF INDIA (2008 [2281 E.L.T. 517 Raj.). Relying on the aforesaid judgment of the Supreme Court in a case....