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2015 (10) TMI 845 - CESTAT MUMBAI

2015 (10) TMI 845 - CESTAT MUMBAI - TMI - Denial of CENVAT Credit - Capital goods - whether the welding electrodes used in the maintenance of machine etc., the CENVAT Credit on the same is allowable or not? - Held that:- following the ration of the earlier decision of this Tribunal in the case of Ultratech Cement Ltd. (2015 (10) TMI 621 - CESTAT MUMBAI), the impugned order is set aside - Decided in favour of assessee. - Appeal No. E/686 to 688/10 - Dated:- 9-4-2015 - Anil Choudhary, Member (J) F .....

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ide Final Order No. A/482-484/15/SMB dated 6.2.2015, which is reproduced as under:- "The issue involved in these appeals is as to whether the welding electrodes used in the maintenance of machine etc., the CENVAT Credit on the same is allowable or not? 2. Vide the impugned order dated 18.8.2010, the learned Commissioner (Appeals) in the appeal of the appellant, which is a cement manufacturer, relying on the ruling of the Hon'ble Apex Court in the case of Steel Authority of India Ltd. Vs .....

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itled to CENVAT Credit on welding electrodes used in the maintenance of capital goods and machinery in plants. Being aggrieved, the appellant assessee is in appeal before this Tribunal. 3. There being common point of law and different period, the appeals are taken up together for sake of convenience. 4. It is noticed that the relevant provision i.e. Rule 2(k) of Cenvat Credit Rules, the 'inputs' were identified as follows: - "input" means- (i) all goods, except light diesel oil .....

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or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1.- The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2.- Input include goods used in the manufacture of capital goods which are further used in the factory .....

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ther directly or indirectly and whether contained in the final product or not qualifies as inputs. He further stated that this is evident, as the definition states that input includes items like, lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, .....

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nt and machinery. The Hon'ble High Court examined the Larger Bench's ruling in Jaypee Rewa Plant (supra) and also examined the ruling of the Hon'ble Apex Court in the case of Commissioner Vs. Jawahar Mills Ltd. 2001 (132) ELT 3 (SC) and J.K. Cotton Spinning & Weaving Mills Co. Ltd. Vs. Sales Tax Officer 1997 (91) ELT 34 (SC) and have observed that judgment of the Hon'ble Supreme Court in the case of J.K. Cotton Spinning & Weaving Mills (supra) has a material bearing on th .....

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nor must they be directly and actually needed for 'turning out or the creation of goods.' The Hon'ble High Court further observed that the Hon'ble Supreme Court even went to the extent of holding, that use of electrical equipments, like lighting, electrical humidifiers, exhaust fan etc. were also taken to be necessary equipment, to effectively carrying on the manufacturing process. Thus, the Hon'ble High Court found it appropriate on appreciation of the judgment in the case .....

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acturing of goods'. Thus, overruling judgment of Jyapee Rewa Plant, the Hon'ble Rajasthan High Court following the spirit of law, laid down in J.K Cotton's case, answered the question in favour of the assessee and against the Revenue. 5.2 The learned Counsel further relies on the ruling of the Hon'ble Rajasthan High Court in the case of UOI Vs. Hindustan Zinc Ltd. 2007 (214) ELT 510 (Raj), wherein the question involved was whether the Tribunal was right in law in allowing the Mod .....

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115 (SC). 5.3 The learned Counsel further urges that following the law laid down by the Hon'ble Rajasthan High Court in the case of Hindustan Zinc Ltd. (supra), the Hon'ble Chhattisgarh High Court has also in the similar facts and circumstances overruled the Larger Bench's decision of the Tribunal in the case of Jaypee Rewa case and has held that the assessee is entitled to avail CENVAT Credit on the welding electrodes used in repair and maintenance of plant and machinery. Accordingl .....

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the ruling of Hon'ble Andhra Pradesh High Court in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. Vs. Commissioner of Central Excise, Tirupati 2012 (278) ELT 167 (AP), wherein similar question of welding electrodes used for repair and maintenance of plant and machinery was involved during the period 1.6.2003 to 31.6.2008. After taking notice of the definition of input under Rule 2(k) of the Cenvat Credit Rules, 2004 and examining the ruling in the case of Hindustan Zinc Ltd. of Hon' .....

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cannot be claimed under Rule 2(k) of the Cenvat Credit Rules, 2004 on the duty paid on welding electrodes used for repair and maintenance of machinery. Accordingly, he prays for dismissing of the appeal. 7. Having considered the rival contentions, we find that from very plain reading of the definition of input as given under Rule 2(k), it is evident that even goods used in relation to, directly or indirectly, in the process of manufacture like, lubricating oils, greases, cutting oils, coolants, .....

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