By TIOL News Service

HYDERABAD, SEPT 01, 2018: THE issue is regarding availment of CENVAT credit of the CEX duty paid on Welding Electrodes, Steel Plates, Sheets and Angles which were used exclusively for repair and maintenance within the factory premises during the period May 2015 to March 2016.

The appellant was issued a SCN for reversal of such CENVAT credit.

The Adjudicating Authority dropped the proceedings but the Commissioner(A) allowed the Revenue appeal by following the decision of the Andhra Pradesh High Court in the case of Sree Rayalaseema Hi Strength Hypo Ltd. - 2011-TIOL-1054-HC-AP-CX .

Aggrieved, the appellant is before the CESTAT.

The Single Member Bench viewed that the Adjudicating Authority was correct in setting aside the demands raised by the show cause notice, for more than one reason.

The CESTAT further observed -

+ It is seen from the records, these repairs and maintenance was in respect of the plant and machinery which is used for manufacturing of final products was the claim which has not been disputed by the lower authorities.

+ If that be so, I find that the First Appellate Authority was completely mis-understood the provisions of Rule 2 (k) of the CENVAT Credit Rules, 2004 which defines the term "input" …

After reproducing the definition of the term "Input", the Bench added -

++ It can be seen from the above reproduced definition, the said definition includes all goods used in the factory by the manufacturer of the final products.

++ In the case in hand, it is undisputed that appellant is a manufacturer and has used various inputs in this case, exclusively for repairs and maintenance of plant and machinery which are used for the manufacturing activity.

Concluding that the Commissioner(A) had not considered definition of inputs in its correct perspective, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-2691-CESTAT-HYD)