J.K. CEMENT WORKS Vs. CCE

JUDGEMENT

(1.) THESE two appeals have been filed by the same appellant against the common order passed by the Commissioner (Appeals) upholding the decision of the adjudicating authority denying cenvat credit to the use of oxygen and acetylene gases for cutting the used liners in the raw mill and cement mill and refurbishing them.

(2.) ACCORDING to the appellant, these gases were being used by them for repairs of various parts of machinery and restructuring and refurbishing the same. These machineries were being regularly used for the manufacture of their final product cement and, therefore, the said gases were being used indirectly in relation to the manufacture of their final product. The appellant relied upon the decision of the Tribunal in Associated Cement Companies Limited v. CCE, Balgaon in support of its claim.

(3.) SHOW cause notices dated 5.03.2004 were issued on the appellant on the ground that the appellant appear to have wrongly availed credit amounting to Rs. 11,861/ - during the period February 2003 to March 2003 and Rs. 97,420/ - during the period February 2003 to December 2003 under Rule 3 of the Cenvat Credit Rules, 2002. It was alleged in the show cause notice that the said oxygen and acetylene gases, falling under chapter sub -heading 2804.19 and 2901.10 respectively of the Excise Tariff Act, were used in repairing of their plant and not in relation to manufacture of cement or clinker. According to the Revenue, such use was not covered under the definition of "inputs" under Rule 2(g) of the said rules. Recovery of the said credit wrongly taken with imposition of penalty and charging of interest was proposed in the show cause notices.