CESTAT Allows CENVAT Credit On Welding Electrodes And Dissolved Acetylene Gas As Inputs In Cement Manufacturing Process

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Suvendu Kumar Pati (Judicial Member) has allowed the CENVAT Credit on Welding Electrodes and Dissolved Acetylene Gas (D.A. Gas) as inputs in the Cement Manufacturing Process.The appellant/assessee is a manufacturer of cement and clinker having a Central Excise registration. For the process of manufacture of cement and clinker, due to grinding and heating, components of coal mills as well as kiln and cement mills get damaged on account of abrasion, and to repair them, the Appellant used welding electrodes and D.A. Gas.The assessee availed credit on tax paid for the purchase of welding electrodes and D.A. Gas. The credit was denied by the Department on the grounds that those cannot be considered inputs because they have no relationship with the final product, namely cement and clinker.A show-cause-cum demand notice was served on the Appellant. The matter was adjudicated upon and the Appellant was asked to refund CENVAT Credit availed against those two components along with interest and penalties on various provisions of the CA Act and CENVAT Credit Rules.The assessee's appeal before the Commissioner of Customs (Appeals) yielded no fruitful result apart from the waiver of the penalty.The Appellant contended that both Welding Electrodes and D.A. Gas qualify as inputs within the amended definition of Rule 2(k)(i) of the CENVAT Credit Rules, 2004 amended w.e.f. 01.04.2011. It also qualifies as capital goods under Clause (iii) of Rule 2(a) for the purpose of claiming CENVAT Credit on duty paid on those two items.The definition of "inputs" has been widened by way of amendment w.e.f. 01.04.2011 to include Welding Electrodes and D.A. Gas in view of its inclusion in Rule 2(k)(i), which reads that all goods used in the factory by the manufacturer of final products are inputs.The department contended that manufacture and repair, maintenance are not the same processes having a link with the final product for which CENVAT Credit cannot be claimed under Rule 2(k) of the CENVAT Credit Rules, 2004.The CESTAT ruled that the pre-amended CENVAT Credit Rules could not be used as a legal precedent for the post-amended definition, which has been broadened to have high amplitude."The credits availed by the Appellant on welding electrodes and D.A. Gas were eligible credits and the Appellant had rightly availed of the same," the CESTAT said.Case Title: M/s Manikgarh Cement Versus Commissioner of Central Excise, NagpurCitation: Excise Appeal No. 87998 of 2019Date: 28.09.2022Counsel For Appellant: Advocate Shamita PatelCounsel For Respondent: Supdt. Authorised Representative P.K. AcharyaClick Here To Read Order

CESTAT Allows CENVAT Credit On Welding Electrodes And Dissolved Acetylene Gas As Inputs In Cement Manufacturing Process

Mariya Paliwala

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INR 1099+GST

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CESTAT Allows CENVAT Credit On Welding Electrodes And Dissolved Acetylene Gas As Inputs In Cement Manufacturing Process

Mariya Paliwala

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INR 1099+GST

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