Full Judgment
2. The issue involved in this case is regarding the eligibility of Cenvat credit on the Welding Electrodes used by the appellant for repair and maintenance of their machinery. It is the contention of the department that such credit is not available to the appellants in view of the orders of the Tribunal in the case of JP Rewa Cement Plant and Triveni Engg 2005 (186) ELT 158.
3. None appeared on behalf of the appellant despite notice Since the matter is on board from 14.8.06, I take up the appeal for disposal in the absence of the appellant or their representative.
4. The learned DR submits that in this case, it appears that the appellant have availed the modvat credit on capital goods and used the same for repair and maintenance of their plant and machinery. It is his submission that the issue is squarely covered against the appellants by the larger Bench decisions in the case of JP Rewa Cement and Triveni Engg. (supra). He reiterates the findings of the Commissioner (Appeals).
5. Considered the submissions made by the learned DR and perused the record. I find from the record that the appellant in repair and maintenance of machinery has used the welding electrodes and it is not clear whether the use of welding electrodes was as input or as capital goods. I find that the Hon'ble Rajasthan High Court in the case of CCE Jaipur v. Neer Shree Cement Ltd. in Excise Reference No 9/2002 has held as under: We do not find any illegality in the order passed by the CIT. The C.IT was right in holding that the 'welding electrodes' which are utilized for repairing the machinery used for manufacture of cent and clinker, are to be treated as inputs in the manufacture of cement and clinker. In Jaypee Rewa Cement v. CCE MP , the Supreme Court held that the appellant was using limestone as raw material for manufacture of cement in its factory by utilizing explosives to extract limestone from mines. The assessee claimed modvat credit under Rule 57-A of the Central Excise Rules, 1944 on the ground that the explosives used in the mining operation were inputs. The Supreme Court, while upholding the contention of the assessee, held as follows: 10. Reading of Rule 57-A clearly shows that the notification is to specify the goods used in or in relation to the manufacture of the final product, whether directly or indirectly. In the present case, inputs which are used in relation to the manufacture even directly would be regarded as an input for the purpose of Rule 57-A. Sub-rule (i) of Rule 57-A does not in any way, specify that the inputs have to be utilized within the factory premises. The explanation contained in Rule 57-A is merely meant to enlarge the meaning of the word 'input' and does not in any way restrict the use of the input within the factory remises nor does the said Rule 57-A require the inputs to be brought into the factory premises at any point of time'.
Having regard to the aforesaid decision of the Supreme Court and keeping in view the circumstances of the case, we are of the view that no question of law arises in the matter and as such, the reference is declined.
It is seen that the lower authorities in this case did not have the privilege of considering the decision of the Hon'ble High Court of Rajasthan, while coming to a conclusion.
6. Accordingly, the impugned order is set aside and the appeal is allowed by way of remand to the original adjudicating authority to consider the issue afresh in the light of the decision of the Hon'ble High Court of Rajasthan as regards the eligibility of Cenvat credit on the welding electrodes used in repair of machineries. The appeal is allowed by way of remand.