Custom, Excise & Service Tax Tribunal
M/S. Mangalam Cements Ltd vs C.C.E. & S.T., Jaipur-I on 17 January, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 17.01.2014
For Approval &Signature :
Honble Mrs. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Application Nos.E/STAY/59427-59429/2013
Appeal Nos. E/58791-58793/2013 -EX[SM]
[Arising out of Order-in-Appeal Nos.64-66(VC)CE/JPR-I/2013, dated 21.06.2013 passed by C.C.E.(Appeals), Jaipur-I]
M/s. Mangalam Cements Ltd. Appellants
Vs.
C.C.E. & S.T., Jaipur-I Respondent
Appearance Shri Bipin Garg, Advocate - for the appellants Shri BB Sharma, DR - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Final Order Nos.50177-50179, dated 17.01.2014 Per Honble Mrs. Archana Wadhwa :
The short issue involved in the present three stay petitions is as to whether the appellant is entitled to avail the CENVAT credit of duty paid on welding electrodes and gases used for repair and maintenance of plant and machinery. The lower authorities have denied the credit on the ground that the said activity cannot be held to be an activity associated with the manufacturing process and as such cannot be called as cenvatable input.
2. I find that the issue is no more res integra and stands settled by the Hon'ble High Court of Chhattisgarh and also by Hon'ble High Courts of Rajasthan and Karnataka. In the latest decision of the Tribunal in the case of Samruddhi Cement Ltd. Vs. C.C.E., Indore [2013 (297) E.L.T. 562 (Tri. Del.)] has considered an identical issue and the entire case law including the contra-judgement of Hon'ble High Court of Andhra Pradesh and has come to the conclusion that the duty paid on the items used for repairs and maintenance would be available as CENVAT credit. For better appreciation, I reproduce the relevant paragraphs of the said decision:-
3. Shri Hemant Bajaj, Advocate, learned Counsel for the appellant submits that the issue in this case already stands decided in favour of the appellant in view of the judgement of Hon'ble High Court of Chhattisgarh in the matter of Ambuja Cements Ltd. v. CCE, Raipur reported in 2010-TIOL-HC-CHHATTISGARH-CX = 2010 (256) E.L.T. 690 (Chhattisgarh) and also by the judgement of Hon'ble Rajasthan High Court in the case of Hindustan Zinc Ltd. 2008 (228) E.L.T. 517 (Raj.) has also taken the same view and held that the Cenvat credit is available on welding electrodes used for repair and maintenance of plant and machinery. In view of these judgements of various High Courts, the impugned order is not sustainable.
4. Shri R.K. Mathur learned DR supported the impugned order, reiterating the findings of the Commissioner (Appeals) and pleaded that Hon'ble Andhra Pradesh High Court in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. v. CCE & C, Tirupati 2012 (278) E.L.T. 167 (A.P.) has taken a contrary view, that Cenvat credit cannot be claimed under rule 2(k) on the duty paid on welding electrodes used for repairs. Therefore, same cannot be treated as input or capital goods. He, therefore, submis that there is no infirmity in the impugned order.
5. I have carefully considered the submissions and perused the records. Though there is a recent judgement of Hon'ble Andhra Pradesh High court in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. v. CCE & C, Tirupati, wherein contrary view has been taken but Hon'ble High Court of Chhattisgarh, Hon'ble Karnataka High Court and Hon'ble Rajasthan High Court have held that welding electrodes used for repairs and maintenance of plant and machinery would be eligible for Cenvat credit. Moreover, the definition of input as given in Rule 2(k) of Cenvat Credit Rules, 2004 covers the goods used in or in relation to manufacture of final products, whether directly or indirectly which is a much wider than the expression used in manufacture. While repair or maintenance by itself is not a process of manufacture, this activity certainly has nexus with manufacture of final product and would be covered by the expression used in or in relation to manufacture of final product as no manufacturing activity is possible with malfunctioning machinery. In view of this, I am of the view that the impugned order is not sustainable. The same is set aside and the appeal is allowed.
3. In as much as the issue stands decided, I follow the above referred decision of the Tribunal and set aside the impugned order passed by the Commissioner (Appeals) and allow the appeals with the consequential relief to the petitioner.
4. The stay petitions and the appeals are disposed of in the above manner.
(Dictated and pronounced in the Open Court) (Archana Wadhwa) Member (Judicial) SSK -4-