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2016 (12) TMI 530 - AT - Central ExciseDenial of CENVAT credit - M.S. Angle, M.S. Channel and welding electrodes - imposition of penalties - Held that: - it appears that subject matter is covered by Hon’ble Supreme Court decision in the case of CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] wherein it was held that Applying the "user test" on the facts in hand, we have no hesitation in holding that the steel plates and M.S. Channels, used in the fabrication of chimney would fall within the ambit of "capital goods" as contemplated in Rule 57Q. It is not the case of the Revenue that both these items are not required to be used in the fabrication of chimney, which is an integral part of the diesel generating set, particularly when the Pollution Control laws make it mandatory that all plants which emit effluents should be so equipped with apparatus which can reduce or get rid of the effluent gases. Therefore, any equipment used for the said purpose has to be treated as an accessory in terms of serial No.5 of the goods described in column (2) of the Table below Rule 57Q - there cannot be any doubt that the M.S. Angle and M.S. Channel are eligible for cenvat credit as they are covered under the definition of either capital goods under Section (2)(a)(A) or input under Section 2(k) of the Cenvat Credit Rules, 2004. In respect of admissibility of cenvat credit for the item namely welding electrodes the Hon’ble Chhattisgarh High Court in the case of Ambuja Cement Eastern Ltd. vs. CCE, Raipur [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT] and Hon’ble Rajasthan High Court in the case of Hindustan Zinc Ltd. vs. Union of India [2008 (7) TMI 55 - HIGH COURT RAJASTHAN] allowed the cenvat credit on the welding electrodes. We follow these decisions and hold that the appellant is entitled to cenvat credit on welding electrodes treating the same as input. Appeal allowed - CENVAT credit allowed - decided in favor of appellant-assessee.
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