Welding electrodes – credit – eligible?
The issue whether Cenvat credit is available on welding electrodes used for maintenance of machinery has been a topic of divergent views even before the hallowed portals of the CESTAT. Today we carry an order of the Bangalore Bench emphatically allowing the credit.
DDT today gives you a peep into the maze of judicial decisions on the subject.
In M/s JAWAHAR MILLS LTD, , the Larger Bench held, Similarly, the other items involved in these cases namely control panels, cables, welding electrodes, etc. will also qualify as capital goods under Rule 57Q and would be eligible for Modvat credit and we order accordingly.
In JAYPEE REWA PLANT - another Larger Bench rules Cenvat / modvat not allowed on welding electrodes and gases used for repairs and maintenance of plant and machinery as they are not integrally linked with the process of manufacture for final products - Appeal rejected
A single Member in STAR PAPER MILLS LTD - – held Welding electrodes and gases used in repair and maintenance of plant and machinery are not eligible inputs for credit
In MODI SUGAR MILLS, another single member held, Credit is not admissible on welding electrode.
In THE INDIA CEMENTS LTD - - MADcase another single member held, Credit is admissible on welding electrodes used for repair and maintenance of eligible capital goods
In TRIVENI ENGG. & INDUSTRIES LTD – another Larger Bench held that Credit is not admissible on welding electrodes as capital goods
In M/s G H C L LTD – -another single member held, - Modvat credit not available on Welding electrodes used for repair of machinery & pipelines as they are not capital goods.
In - THE INDIA SUGARS AND REFINERIES LTD - , a division bench held, Welding electrodes, oxygen gas and Acetylene Gas used for welding the punctured pipes carrying the hot sugar juice should be treated as a part of process of manufacture and they are eligible inputs.
In MANIKGARH CEMENT - – a Single Member held, Credit not admissible on Welding Electrodes used for repair and maintenance – LB decision in Jaypee Rewa followed.
In J K CEMENT WORKS - , sitting as a single Member Justice Abhichandani deprecated the practice of division benches not following the decisions of Larger Benches and observed, Faulty attitudes in a decision-making process can destroy the institutions. Decisions can be corrected only by the superior forums or on review, but when attitudes become faulty the very basis of judicial institutions would get shaken, leading to utter chaos and confusion. Therefore, this court is bound to follow the larger bench decision in preference to the decision of the Division Bench, which could not have declared a larger bench decision as overruled. Only a bench larger than the said larger bench deciding Jaypee Rewa Plant (supra) could have declared that decision to have been either expressly or impliedly overruled by a decision of a higher forum, or itself overruled it. Therefore, none of the contentions raised on behalf of the appellant warrant any interference with the impugned order of the Commissioner (Appeals), which has rightly followed the decision of the larger bench in Jaypee Rewa Plant (supra), in disallowing the cenvat credit to the appellants in respect of use of oxygen gas and acetylene gas.
In M/s ADITYA CEMENT - , a single Member held, Cenvat Credit on welding electrodes used for repairs/maintenance of capital goods – not eligible
Disposing of 10 appeals in , a Single Member, held,that assessees are eligible to avail Cenvat credit in respect of welding electrodes
In CHHATA SUGAR CO LTD - , a single Member held that Welding electrodes used for repair and maintenance of capital goods – not eligible for Cenvat credit
In MANIKGARH CEMENT - , a single Member held, Cenvat Credit not available on Welding Electrodes used for repairs and maintenance - judicial propriety requires that Bench follows law declared by the Larger Bench and not to adjudge the correctness or otherwise of the same
Justice Abhichandani again sitting single in HINDUSTAN ZINC LIMITED - held, cenvat credit was not admissible to the appellant on welding electrodes.
In I T C LIMITED - – a single Memeber held that Welding electrodes have a role to play in the manufacture of final products and within the ambit of “in or in relation to the manufacture of final products” . HELD Cenvat credit on welding electrodes is eligible. Appeal allowed with consequential relief if any
Around the same time, a Single Member of the Mumbai Bench, in ACC LTD - , held that Welding electrodes can neither be considered as capital goods nor as inputs - Contrary view taken by the Division Bench in India Sugar & Refineries Ltd. in not following the decision of Larger Bench of the Tribunal in Jaypee Rewa & Triveni Engg cannot be followed.