In a recent ruling, Rajasthan High Court’s, Oxygen Gas and Acetylene Gas, which are utilized for repairing and maintaining plant and machinery, can be classified as components, spares, or accessories of welding machines falling under Heading 84.68 of Chapter 84 of the Tariff. As a result, they are eligible for CENVAT Credit as capital goods under Rule 2(a)(A)(iii) of the CENVAT Rules, 2004.
The application filed on behalf of the appellant is being considered, requesting the decision of the appeal to be based on the judgment delivered by the Division Bench of this Court in the case of Hindustan Zinc Ltd. vs. Union of India & Others.
The counsel of appellant has submitted that leave to appeal against the above-referred judgment filed by the revenue has already been dismissed as withdrawn by the Supreme Court. It is further submitted that since the judgment passed in Hindustan Zinc Ltd.’s case (supra) has attained finality, this appeal is liable to be allowed in terms of the aforesaid judgment.
It was also submitted that the Oxygen Gas and Acetylene Gas are accessories of a welding machine and are used for producing and processing of any goods and for bringing about the change in any substance for the manufacture of final product would be capital goods and would qualify for CENVAT Credit.
On the other hand, the revenue’s counsel has presented an argument stating that even though the Special Leave Petition (SLP) against the judgment made by this Court in the case of Hindustan Zinc Ltd. was withdrawn and dismissed, the Supreme Court, in dismissing it, has explicitly noted that the question of law remains unresolved.
The bench of Justice Rajendra Prakash Soni and Justice Vjay Bishnoy relied on the judgment of Hindustan Zinc Ltd. Vs. Union of India & Ors and observed that the capital goods can be machines, machinery, plant equipment, apparatus, tools or appliances. Any of these goods, if used for producing, or processing of any goods, or for bringing about any change in any substance, for the manufacture of final product, would be ‘capital goods’, and would qualify for MODVAT credit.
Therefore, it was determined that the appellant is entitled to the credit they have claimed. As a result, the division bench resolved and dismissed the dispute raised in the case.
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