TMI Blog2013 (11) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 2 - SUPREME COURT OF INDIA] - while interpreting the scope of the expression used in the manufacture of in Section 8 (3) (b) of Central Sales Tax Act, 1956 has held that if a process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity, the manufacture may, even if theoretically possible, be commercially inexpedient, the goods intended in that process or activity would have to be treated as used in the manufacture - the scope of the expression used in or in relation to manufacture, whether directly or indirectly’ in the definition of ‘input’ in Rule 2 (k) of the Cenvat Credit Rules, 2004 would be much wider. The question as to whether repair and maintenance is an activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from January 2009 to August 2009. The department being of the view that these items are not covered by the definition of input or capital goods, initiated proceedings for recovery of the Cenvat credit alongwith interest and imposition of penalty which resulted in issue of order-in-original dated 31/3/10 by which the Assistant Commissioner confirmed the above-mentioned Cenvat credit demand alongwith interest and imposed penalty of equal amount on the appellant. This order of the Assistant Commissioner was upheld by CCE (Appeals) vide order-in-appeal dated 22/10/10 except for reduction of penalty to Rs. 20,000/-. In this order, the Commissioner (Appeals) held that the welding electrodes used for repair and maintenance are not eligible for Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of Hon ble Karnataka High Court in the case of CCE, Bangalore- I vs. Alfred Herbert (India) Ltd. reported in 2010 (257) E.L.T. 29 (Kar.), wherein it has been held inputs used for repair and maintenance of the plant and machinery are eligible for Cenvat credit, that as regards the steel items namely MS Steel, MS Plates and MS Angles, the same have either been used for fabrication of various items of sugar mill machinery or for repair and maintenance of sugar mill machinery, as has been observed by the Assistant Commissioner in his order-in-original as well as in the show cause notice, that Commissioner (Appeals) has in his order has wrongly mentioned that part of the steel items were used in erection of supporting structures for mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . vs. CCE, Tirupati reported in 2012 (278) E.L.T. 167 (A.P.), wherein it was held that welding electrodes used for repair and maintenance of the plant and machinery are not eligible for Cenvat credit. 5. I have considered the submissions from both the sides and perused the records. 6. So far as eligibility for Cenvat credit of the welding electrodes used for repair and machinery of the plant and machinery is concerned, this issue stands decided by the judgment of three High Courts, as mentioned above - judgment of Hon ble Rajasthan High Court in the case of Hindustan Zinc Limited vs. Union of India (supra), judgment of Hon ble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. vs. CCE, Raipur (supra) and judgment of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules, 2004 would be much wider. Moreover, Hon ble Calcutta High Court in the case of Singh Alloys Steel Ltd. vs. Assistant Collector of Central Excise reported in 1993 (66) E.L.T. 594 (Cal.) has held that the definition of input does not depend on what ought to be used but what is commercially expedient to use and expression in relation to used in Rule 57A has wide connotation. Therefore, for determining the eligibility of an item for Cenvat credit, what is relevant is as to whether the activity in which that item is required has nexus with manufacture or in other words without that item the manufacturing, though theoretically possible, is not commercially feasible. Repair and maintenance, in my view is an activity without whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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