Case Law Details
Manikgarh Cement Vs Commissioner of Central Excise (CESTAT Mumbai)
As could be noticed from para 24 of the Order-in-Original, the adjudicating authority had observed that Welding Electrodes and D.A. Gas were used in the cement manufacturing plant of the Appellant for the purpose of repair and maintenance of its plant and machinery. This being observation of the adjudicating authority there is no denial of the fact that plant and machinery which were being used for manufacturing of final product were being kept in usable with condition periodic repair and maintenance, in which these two components were being used. Hence, both Welding Electrodes and D.A. Gas are required for smooth process of manufacturing, for which definition of input provided under Rule 2(k)(i) is squarely applicable as the clarificatory Circular of the Board issued on 29.04.2011 clearly mentions that goods used in relation to manufacture of final product in indirect way also excludes the definition contained in the said Rule 2(k)(F) that deals with goods having no relationship with manufacture of final product. Relied upon case laws namely Sree Rayalaseema Hi-strength Hypo Ltd. decision, cited supra pronounced on November 16, 2011, that was relied upon in the Order-in-Appeal, was pronounced with reference to pre-amended CENVAT Credit Rules which cannot be applied as a judicial precedent to the post amended definition which has broadened the meaning to have high amplitude. I am, therefore, of the considered view that the credits availed by the Appellant on Welding Electrodes and D.A. Gas are eligible credits and Appellant had rightly availed the same.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Denial of CENVAT Credit of Rs.10,28,852/- on Welding Electrodes and Dissolved Acetylene Gas (D.A. Gas) as inputs in the Cement manufacturing process for the period from April, 2013 to June, 2017 availed by the Appellant that resulted in confirmation of recovery of the credit amount including interest and penalties by the Commissioner (Appeals) is assailed in this appeal.
2. Facts of the case, in a nutshell, is that Appellant is a manufacturer of Cement and Clinker having Central Excise registration. For the process of manufacture of Cement and Clinker, due to grinding and heating, components of coal mill as well as kiln and cement mills get damaged on account of abrasion and to repair the same, Appellant had used Welding Electrodes and D.A. Gas and also availed credit on tax paid for such purchase of Welding Electrodes and D.A. Gas. The said credit was denied by the Department on the ground that those cannot be treated as inputs as they have no relationship with the manufacture of final product namely cement and clinker. Accordingly, a show-cause-cum demand notice was served on the Appellant, matter was adjudicated upon and Appellant was asked to refund CENVAT Credit of Rs.10,28,852/-availed against those two components alongwith interest and penalties on various provisions of the CA Act and CENVAT Credit Rules. Appellant’s appeal before the Commissioner of Customs, Central Excise & GST (Appeals), Nagpur yielded no fruitful result apart from waiver of penalty. Hence, the appeal before this Tribunal.
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