N.P.GUPTA, KISHAN SWAROOP CHAUDHARI, JJ. - (1.) THIS appeal, by the Assessee, has been filed against the Order of the Tribunal dated, 26th July, 2005,dismissing the same, by relying upon a larger Bench Judgment of the Tribunal, in Jaypee Rewa Plant v. CCE reported in , and thereby upholding the disallowance of MODVAT/ CENVAT credit.
(2.) THE necessary facts are, that the Assessee was issued a Show Cause Notice, on the ground, that Assessee has availed of MODVAT/CENVAT credit on welding electrodes, during June, 2003 to March, 2004, treating the same as capital goods, whereas the same appeared not to be covered under the definition of capital goods. The Assessee contested the notice and contended, that while electrodes were not used by them for fabrication of structure/sheds, rather they are accessories of machinery for soldering, brazing or welding, falling under Chapter Heading No. 84.68 and since Chapter Heading No. 84.68 is an item, eligible under Rule 2b(i) of the CENVAT Credit Rules, 2002, the welding electrodes acquires eligibility under Rule 2(b)(iii). It was also contended, that if the credit is not allowed under capital good scheme, then, the claim of the Assessee may be treated as having been made treating the electrodes as inputs. It was then contended, that welding electrodes are necessarily used for maintenance of their plant for smooth running, as these are mainly used for affixing the component, namely sheets, plates etc. on the damaged parts of the machines. As such they are being used as inputs, in or in relation to, the manufacturer of final products.
(3.) LEARNED Dy. Commissioner confirmed the demand, by holding, that the welding electrodes do not fall under any of the heads mentioned in Rule 2. Since goods are used for repairing/maintenance of the capital goods, are not eligible for CENVAT credit.;