TMI Blog2018 (7) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ously, the rates of Central Excise duties as well as Service Tax were also harmonised reducing the gaps between them and eventually, they have been merged into the Goods & Services Tax - In 2002 Rules, inputs used in or in relation to manufacture were allowed credit and this definition was further enlarged in 2004 Rules. In 2011, credit was allowed on all goods used in the factory by the manufacturers subject to some exceptions. It no longer mattered whether the inputs were used in or in relation to manufacture or not. The relevant period in the current cases is May, 2013 to May, 2015. Therefore, the definition of inputs under CENVAT Credit Rules, 2004 as amended in 2011 is relevant for the purpose - In terms of the amended definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Commissioner (Appeals) which were rejected. The present appeals are against this Orders-in-Appeal passed by the Learned First Appellate authority. 3. The facts are not in dispute that the inputs were used for repairs and maintenance of their capital goods. The simple question to be considered now is whether these qualify as inputs under the CENVAT Credit Rules, 2004 or not. The Learned Counsel for the appellant argues that in the case of their sister concern viz., M/s Madras Cements Ltd., Learned Single Member of this Bench had vide Final Order No. A/30228/2016 allowed credit of CENVAT on the welding electrodes. He also submits that in earlier Order passed by the Bangalore Bench in respect of the same assessee viz., M/s Madras Cem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly and categorically denied the CENVAT credit on welding electrodes used for repairs and maintenance of plants and machinery, holding that they are not inputs in terms of CENVAT Credit Rules. It is his argument that the judgment of the Hon ble High Court of Andhra Pradesh is binding on this Bench and must be followed. He also explained that this issue was also dealt by the Hon ble Apex Court in the case of Ramala Sahkari Chini Mills Ltd. [2016 (334) ELT 3 (SC)], in which the Hon ble Supreme Court referred the matter to the Chief Justice of India to constitute a Larger Bench. The Larger Bench in its judgment has answered the question and referred to it namely that the word include in the definition of inputs in the CENVAT credit enlarg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged them in 2004. The process of expansion of scope of CENVAT Credit continued even after 2004; simultaneously, the rates of Central Excise duties as well as Service Tax were also harmonised reducing the gaps between them and eventually, they have been merged into the Goods Services Tax. The case of Ramala Sahkari Chini Mills Ltd before the Hon ble Apex Court was during CENVAT Credit Rules, 2002. Rule 2(g) of these Rules defined inputs as follows: (i) used in or in relation to the manufacture of the final product, whether directly and indirectly, and whether the said goods are contained in the final product or not, (ii) covered within the six categories of goods enumerated in Rule 2(g) and (iii) used within the factory of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product, the value of which is included in the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam for captive use; or (iv) all goods used for providing any output service; but excludes- (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for- (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of any taxable service specified in sub-clauses (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the factory of manufacturer and these capital goods are used for manufacture of the final product although the relationship is remote and not direct. So by no stretch of imagination can it be said that these welding electrodes have no relationship whatsoever with the manufacture of the final product. Therefore, in terms of the amended definition of inputs under CENVAT Credit Rules, 2004 (after 2011) as is applicable to the relevant period, the welding electrodes can definitely be called inputs. I, therefore, find that the judgment of the Hon ble High Court of Andhra Pradesh in the case of Sree Rayalaseema Hi-Strength Hypo Ltd (supra) does not apply in view of the revised CENVAT Credit Rules. In consequence, I find that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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