DSM SUGAR Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE facts giving rise to these appeals are, in brief, as under:

(2.) SHRI Alok Arora, Advocate, the ld. Counsel for the appellant, pleaded that so far as the welding electrodes and paint and thinner are concerned, the use of these items for repair and maintenance of capital goods is not disputed; that paints and thinners are specifically covered by the definition of input and since the same are used to protect the capital goods from rust, the denial of Cenvat credit in respect of the same is incorrect; that welding electrodes used for repair and maintenance of the plant and machinery are eligible for Cenvat credit in view of judgment of Hon'ble Chhattisgarh High Court in the case of Ambuja Cements Eastern Ltd. v. CCE, Raipur reported in, 2010 (256) E.L.T. 690 (Chh), and judgment of Rajasthan High Court in the case of Union of India v. Hindustan Zinc Ltd. reported in, 2008 (228) E.L.T. 517; that the Commissioner (Appeals)'s observation that the appellant have not produced any evidence regarding the use of welding electrodes in fabrication or repair and maintenance of the capital goods and regarding use of paints/thinners for applying on capital goods for protection from rust is incorrect and as this ground has not been taken even in the show cause notice inasmuch as the show cause notice has been issued on the basis that welding electrodes; welding electrodes and paints & thinners are not inputs, that as regards the H.R. coils, H.R. sheet, G.C. sheet, Angles, Channels shapes and sections, etc., the same except for some quantity which has been used for making of supporting structures for machinery, have been used in fabrication of various machinery or parts thereof; that in this regard, the appellant had furnished the evidence regarding the use of these items in form of store register showing the receipt of these items, issue slips as well as certificate of G.M. (Technical) of the factory countersigned by a Chartered Engineer; that issue slips clearly show the quantity of the steel item, the description of the steel item and where the same was used; that neither in the order -in -original nor order -in -appeal the use of these items has been considered and at both the stages the Cenvat credit has been denied; on the general ground that these items are normally used for supporting structure; that the ground on which the Cenvat credit has been denied in respect of steel items used in fabrication of machinery or parts thereof is totally incorrect, that when the steel items are used for fabrication of capital goods or parts thereof, the same would be eligible for Cenvat credit as input as definition of input, as given in Rule 2(k) of the Cenvat Credit Rules, 2004 also covers the items used for fabrication of capital goods for use in the factory except for the inputs used in fabrication of supporting structures, foundation, etc.; that the evidence regarding use of steel items in fabrication of sugar mill machinery and parts thereof has been produced by the appellant but the same has not been considered and that in view of this, impugned order denying the Cenvat credit in respect of steel items is not correct.

(3.) I have considered the submissions from both the sides and perused the record.