2019 (6) TMI 317

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....the case of the Revenue that the welding electrodes were not used by the appellant for manufacture of final products and they have no relationship whatsoever with the manufacture of final products. The appellant manufactures iron castings which do not involve welding. Welding electrodes in question were used in maintenance and repair of their machinery on which no excise duty is paid because they are used within the factory of manufacture. Accordingly show cause notices were issued and the demands were confirmed to recover the CENVAT credit availed by the appellant on welding electrodes under Rule 14 read with Section 11A(1) and 11(AA) of Central Excise Act 1944. It was also proposed to impose penalties under Rule 15(1) of CENVAT Credit Rul....

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....enance of their capital goods. Therefore there is a direct relationship between the use of welding electrodes and the manufacture of their final products. Once this position is accepted, CENVAT credit cannot be denied on the welding electrodes to them. He relies on the decision in the case of India Cements Ltd Vs CCE & C Hyderabad [2016(341)ELT 422 ((Tri-Hyd)] wherein this Bench has held that for the period post 1st April 2011, welding electrodes used in repair and maintenance of capital goods within the factory of manufacture are eligible for CENVAT credit as per the revised definition of inputs under Rule 2(k) of CENVAT Credit Rules 2004. He further relies on the judgement of the Hon'ble High Court of Madras in the case of Tamailnadu News....