2009 (3) TMI 843 - AT - Central Excise

Summary

Issues involved:
1. Denial of credit on Welding Electrodes and penalty
2. Admissibility of credit on M.S. Plates and Shapes of Iron and Steel

Analysis:

Issue 1: Denial of credit on Welding Electrodes and penalty
The appeals were filed against the denial of credit on Welding Electrodes and penalty. The Tribunal noted that the Welding Electrodes were used for repair and maintenance of plant and machinery. Referring to a judgment by the Hon'ble Rajasthan High Court in the case of Hindustan Zinc Ltd. v. Union of India, it was established that welding electrodes used for such purposes are eligible for Cenvat Credit. This decision overruled the Tribunal's Larger Bench decision in the case of Jaypee Rewa Plant. The Tribunal also mentioned a case where credit on Welding Electrodes was denied following the Larger Bench decision, which was upheld by the Supreme Court. However, another Tribunal case allowed the credit on Welding Electrodes for maintenance and repair of plant and machinery. Consequently, the denial of credit on Welding Electrodes was set aside based on the precedent that supported the eligibility of such credit.

Issue 2: Admissibility of credit on M.S. Plates and Shapes of Iron and Steel
Regarding the admissibility of credit on M.S. Plates and Sheets, the Commissioner (Appeals) had passed an order in line with a previous Tribunal decision. The Department had filed an appeal against this order. The Tribunal mentioned that in the assessee's own case, credit on M.S. Plates and sheets had been allowed, leading to an appeal by the Department. The assessee argued that the Hon'ble Rajasthan High Court had held that M.S./S.S. Plates used for repair and maintenance of plant and machinery, which are further used in the manufacturing process, are eligible for Cenvat Credit. Relying on this judgment, the Tribunal upheld the admissibility of credit on M.S. Plates and sheets. Consequently, the appeals filed by the Revenue were rejected, while the appeals filed by the assessees were allowed.

This comprehensive analysis of the judgment highlights the key issues involved, the legal reasoning applied, and the final decision rendered by the Appellate Tribunal CESTAT, New Delhi.