Order Date: 30 August 2022

Facts-

• The Appellant, DRA Industries Ltd manufactures MS Billets and avails the benefits of Cenvat Credit and pays central excise duty on its final products. The Superintendent of Central Excise has found that the appellant had availed Cenvat credit on welding electrodes and HR Coils/Sheets during the period July 2015 to March 2016 under the category of inputs.
• A show cause notice was issued by the Assistant Commissioner alleging that the HR Coils and welding electrodes were used by the appellant for lining around furnaces and for repair of capital goods. It does not qualify as inputs under Rule 2 (k) of Cenvat Credit Rules, 2004.
• Aggrieved, the appellant filed this appeal.

Issue-

• Whether HR Sheets/ Coils and welding electrodes which are used for lining the plant and in its maintenance qualify as inputs under Rule 2 (k) of CCR, 2004 or not?

Order-

• The Tribunal observed that Rule 2 (k) as applicable during the relevant period reads as “input” means all goods used in the factory by the manufacturer of the final product. Therefore, Cenvat Credit is admissible on such goods. There is no dispute that the welding electrodes were used for maintenance of the plant and the HR Coils/Sheets were used in making lining around the furnaces in the plant.
• Evidently, the plant will be within the factory. Since the HR Coils as well as the welding electrodes are used within the factory of the manufacturer, Cenvat credit is admissible on both as inputs. 
• Tribunal further observed that this issue is no longer resintegra and the jurisdictional High Court of Andhra Pradesh has, in the case of Sree Rayalaseema Hi-Strength Hypo Ltd. versus Commissioner of Customs & Central Excise, Tirupati held that the goods in used their repair and maintenance qualify as inputs under Rule 2 (k) of CCR. 
• The Tribunal therefore held that the appellant is entitled to Cenvat Credit as inputs on the HR Coils/Sheets and welding electrodes used in repair and maintenance of the capital goods.
• The appeal filed by the appellant is allowed and the impugned order is set aside with consequential relief.