Case Title: Hindustan Zinc Ltd. Versus C.C.E.
Case No.: D.B. Central/excise Appeal No. 4/2010
Decided on: 11/07/2023
Coram: HON’BLE MR. JUSTICE VIJAY BISHNOI
HON’BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
Facts of the case:
The appellant/assessee, Hindustan Zinc, challenged the order of the Tribunal. The issue raised was whether the tribunal was correct in holding that Welding Electrodes used for repair and maintenance of plant and machinery as well as other welding work in the building area are eligible for CENVAT Credit when, in fact, the welding electrodes are not capital goods as defined under Rule 2 (b) of the erstwhile Cenvat Credit , 2002, now Rule 2 (a) of the Cenvat Credit Rules, 2004.
The appellants have submitted that the question of law, framed in these appeals, has already been answered in favour of the assessee and against the revenue by the Division Bench of this Court vide aforesaid judgment passed in the case of Hindustan Zinc Ltd.
The appellants have also submitted that leave to appeal against the referred judgment filed by the revenue has already been dismissed as withdrawn by the Hon’ble Supreme Court. It is further submitted that since the judgment passed in Hindustan Zinc Ltd.’s case has attained finality, these appeals are liable to be allowed in terms of the aforesaid judgment.
The respondent, department has already granted benefit to the appellants for various time periods while holding that the welding electrodes used for repairing and maintenance of plant & machinery are eligible for CENVAT credit both as capital goods as well as inputs. Copies of such orders are annexed with the application No.1/23.
Judgement:
The Rajasthan High Court has granted CENVAT Credit to Hindustan Zinc and held that welding electrodes used for repairing plants and machinery are capital goods and inputs.
The bench of Justice Vijay Bishnoi and Justice Yogendra Kumar Purohit has relied on the decision of the Supreme Court in the case of Jawahar Mills Ltd. The bench of Justice Vijay Bishnoi and Justice Yogendra Kumar Purohit has relied on the decision of the Supreme Court in the case of Jawahar Mills Ltd. . vs. CCE, in which it was held that Welding Electrodes are eligible inputs for availing of CENVAT Credits and can also be considered capital goods since they are used for repair and maintenance of machinery that qualifies for input credits.
The court, while explaining the expression “in the manufacture of goods” stated that it should normally encompass the entire process carried on by the dealer, of converting raw materials into finished goods, where any particular process or activity is so integrally connected with the ultimate production of the goods,but for that process, manufacturing or processing of the goods would be commercially inexpedient, and goods required in that process would fall within the expression “in the manufacturing of goods”.
Analysis
These appeals has been set at rest by the Division Bench of this Court by judgment passed in Hindustan Zinc Ltd.’s case, while answering the question framed in these appeals in favour of the assessee, deem it appropriate to allow these appeals in terms of the judgment passed by the Division Bench of this Court in Hindustan Zinc Ltd.’s case.
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Written by: Mahima Saini
