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2014 (10) TMI 53 - AT - Central ExciseDisallowance of CENVAT Credit - Credit on capital goods - Held that:- Same have been used for transportation of the raw sugar imported in bulk from the port for the import to the appellant’s factory. Hence, in view of the Tribunal's judgment in the case of J.K. Sugar Ltd. vs. CCE, Meerut - II (2010 (5) TMI 212 - CESTAT, NEW DELHI), the same would not be eligible for Cenvat credit and, as such, the Cenvat credit demand on account of this item is upheld. As regards the Cenvat credit demand in respect of other items namely Welding Electrodes and MS Angles, Channels and Plates, the appellant’s plea is that these items have been used for repair and maintenance of the plant and machinery and for this purpose, the steel has been used for fabrication of the components of the machinery for replacing the worn out parts. Conclusion that the steel items have not used for repair and maintenance of plant and machinery but have been used for supporting structures or foundation of the machinery, is not correct. Since, these items have been used for repair and maintenance, the same would be eligible for Cenvat credit, in view of judgment of Hon’ble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. - [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT] and judgment of Hon’ble Rajasthan High Court in the case of Union of India vs. Hindustan Zinc Ltd. reported in [2006 (5) TMI 44 - HIGH COURT RAJASTHAN]. As regards welding electrodes, there is no dispute that the same have been used for repair and maintenance of plant and machinery. Therefore, the Cenvat credit demand on the basis of denial of Cenvat credit in respect of Welding Electrodes and steel items is not sustainable. while the Cenvat credit demand in respect of steel items and welding electrodes and penalty on this account is set aside, the Cenvat credit demand in respect of PP bags and penalty of equal amount is upheld. - Decided partly in favour of assessee.
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