Nocil Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PKS/377/BEL/2010 dated 19.10.2010 passed by Commissioner of Central Excise (Appeals), Mumbai-III)

For approval and signature:

Honble Mr. Ramesh Nair, Member (Judicial) ======================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :

CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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NOCIL Ltd. Appellant Vs. Commissioner of Central Excise, Belapur Respondent

Appearance: Shri Prasad Paranjape, Advocate, for appellant Shri Rakesh Goyal, Additional Commissioner (AR), for respondent

CORAM: Honble Mr. Ramesh Nair, Member (Judicial)

Date of Hearing: 7.1.2015 Date of Decision: 7.1.2015

ORDER NO

The appeal is directed against order-in-appeal No. PKS/377/BEL/2010 dated 19.10.2010 passed by Commissioner of Central Excise (Appeals), Mumbai-III, wherein the original order dated 29.9.2009 passed by the Deputy Commissioner of Central Excise & Customs, Belapur, was set aside and the Revenues appeal was allowed. The issue involved in this case is whether cenvat credit is available on welding electrodes used in repair and maintenance of plant and machinery installed in the factory of the appellant, which is used in the manufacture of final product.

2. Shri Prasad Paranjape, learned counsel for the appellant, submits that though they claimed cenvat credit on the welding electrodes considering it as input, but during the adjudication, they made a claim before the original authority that since the welding electrode was used in repair and maintenance of plant and machinery, the same can be allowed under capital goods. He submits that the issue in question has been dealt in various judgments by the Tribunal, Honble High Courts and Honble Supreme Court. He placed reliance on the following case laws:-

(i) UOI vs. Hindustan Zinc Ltd. reported in 2007 (214) ELT 510 (Raj.), which was upheld by the Honble Supreme Court reported in 2007 (214) ELT A115 (SC);

(ii) Ambuja Cements Eastern Ltd. vs. CCE, Raipur reported in 2010 (256) ELT 690 (Chhattisgarh);

(iii) CCE, Trichy vs. CESTAT, Chennai reported in 2014 (309) ELT 71 (Mad.);

(iv) CC,CE&ST, Guntur vs. Andhra Sugars Ltd. reported in 2014 (305) ELT 150 (Tri.-Bang.), and

(v) L.H. Sugar Factory Ltd. vs. CCE, Meerut-II reported in 2011 (272) ELT 275 (Tri.-Del.).

3. It is his submission that in view of the above judgments, the issue is settled that cenvat credit on welding electrodes used in repair and maintenance of plant and machinery is admissible.

4. Shri Rakesh Goyal, learned Additional Commissioner (AR) appearing for the Revenue, submits that welding electrode is not used in the manufacture of final product. Accordingly, it does not qualify as input in terms of the definition provided under sub-rule 2(k) of the Cenvat Credit Rules, 2004. It is his submission that since the appellant initially claimed cenvat credit on welding electrodes under input, they are not entitled for the credit. In support of his contention, he placed reliance on the following judgments:-

(i) SAIL vs. CCE, Ranchi reported in 2008 (222) ELT 233 (Tri.-Kolkata). This judgment was upheld by the Honble Supreme Court reported in 2008 (229) ELT A127 (SC);

(ii) Sree Rayalaseema Hi-Strength Hypo Ltd. vs. CC&CE, Tirupati reported in 2012 (278) ELT 167 (A.P.), and

(iii) Lloyd Metals & Engineers Ltd. vs. UOI reported in 2010 (252) ELT 355 (Bom.).

5. I have carefully considered the submissions made by both sides. It is undisputed fact of the case that the appellant has availed credit on welding electrodes which were admittedly used for repair and maintenance of plant and machinery. Though initially the appellant claimed cenvat credit under input, but during adjudication, they made alternate claim before the adjudicating authority under capital goods.

6. On going through the judgments cited by both sides, I observe that cenvat credit on welding electrodes if used for repair and maintenance of plant and machinery, is admissible. As regards the reliance placed by the Revenue on the various judgments, it is observed that all the judgments are mainly on the issue whether cenvat credit on welding electrodes is available under input. However, as per the judgments on which reliance is placed by the appellant, wherever the welding electrodes were used for repair and maintenance of plant and machinery, cenvat credit has been allowed.

7. In view of the legal position as discussed above, I am of the considered view that since in the present case, welding electrodes are used for repair and maintenance of plant and machinery, the appellant is entitled for cenvat credit. I, therefore, allow the appeal with consequential relief, if any, in accordance with law, and set aside the impugned order.

(Dictated in Court)

(Ramesh Nair) Member (Judicial)

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