ORDER
S.S. Kang, Vice President
1. Heard both sides. The appellants filed this appeal against the impugned order whereby Cenvat credit on Welding Electrodes, plates, Shapers, Shafts and packing material was denied.
2. I find that the issue in respect of Welding Electrodes is settled in the following decisions of the Larger Bench of the Tribunal, namely Triveni Engg v. CCE Meerut reported in 2005 (186) ELT 158 and Jaypee Rewa Plant v. CCE Raipur . In view of these decisions, denial of credit in respect of welding electrodes is upheld.
3. In respect of Packing material, I find that the appellants are engaged in the manufacture of BP sugar and molasses and this packing material is used to prevent leakage in the pipes. I find that in the impugned order, the fact that packing material is used as mechanical seals for not getting the heat, liquid etc being out flown is admitted. In these circumstances, denial of credit is not sustainable.
4. The credit in respect of shaft is denied as the same is classified under heading 73.26 of the Tariff which is not included in the scope of the capital goods. I find that the definition of capital goods also included as parts, components of specified machinery.
5. As shaft is used as part of mill, therefore, denial of credit is not sustainable.
6. The plates, shapers are used as raw material for fabrication of component and specified goods which are used in the manufacture of excisable goods. The Commissioner (Appeals) in the impugned order, gave a finding of fact that these items are used as raw material for capital goods. As per definition of inputs, credit in respect of raw material used for fabrication of manufacture of capital goods, which are further, manufactured of excisable goods, is admissible. In these circumstances, denial of credit in respect of raw material of capital goods is also not sustainable hence set aside.
7. In respect of penalty on account of denial of credit on welding electrodes, I find as the Larger Bench now settles the issue, hence it is not a case of imposition of penalty. The penalty is set aside.
The appeal is disposed of as indicated above.
(Order dictated and pronounced in the open Court).