Cement Manufacturer Entitled To Cenvat Credit On Welding Electrodes: CESTAT
Mariya Paliwala
19 July 2024 9:11 AM IST
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cement manufacturers are entitled to cenvat credit on welding electrodes as inputs used in the manufacture of final products, namely cement and clinker.The bench of Binu Tamta (Judicial Member) has observed that as per sub-rule 4 of Rule 57-A of the Central Excise Rules, 1944, the credit of...
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cement manufacturers are entitled to cenvat credit on welding electrodes as inputs used in the manufacture of final products, namely cement and clinker.
The bench of Binu Tamta (Judicial Member) has observed that as per sub-rule 4 of Rule 57-A of the Central Excise Rules, 1944, the credit of specified duty is allowed in respect of two categories of inputs, namely (i) inputs used in the manufacture of final products and (ii) inputs used in or in relation to the manufacture of final products, whether directly or indirectly, and whether contained in the final product or not.
The appellant/assessee is a manufacturer of cement and clinker with manufacturing plants and machinery in Chittorgarh. They have received welding electrodes for the repair and maintenance of plant and machinery, which are used for the manufacture of the products, i.e., cement and clinker. A show cause notice was issued that welding electrodes could not be considered input, and therefore, CENVAT credit was not available on them.
The Assistant Commissioner dropped the demand as proposed in the show cause notice.
The department filed an appeal arguing that the CENVAT credit is inadmissible on welding electrodes, which are used for the repair and maintenance of plants and machinery, and that these activities are not related to the manufacture of the final products. The appeal was allowed, and the order was passed, confirming the demand under the show cause notice.
The issue raised was in respect of the admissibility of CENVAT credit on welding electrodes as inputs.
The tribunal, while allowing the appeal, held that the appellant is entitled to the benefit of CENVAT credit.
Counsel For Appellant: Saurabh Suman Sinha
Counsel For Respondent: Rohit Issar
Case Title: M/s. Nuvoco Vistas Corporation Limited Versus
Case No.: Excise Appeal No.55800 of 2023 (SM)
