Customs, Excise and Gold Tribunal - Mumbai
M/S. Adarsh Industries vs Commissioner Of Cen. Excise, Mumbai. ... on 9 May, 2001
Equivalent citations: 2002(147)ELT407(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. On hearing both sides, the appeal was taken up for final disposal on granting waiver of pre-deposit of duty of Rs. 26,410.40 and penalty of Rs. 1000/-.
2. The dispute is on the availability of certain articles in terms of Rule 57Q of the Central Excise Rules, 1944. The denial of credit on Fire Extinguishers on the ground that they were safety devices and did not participate in the production of goods, is not very keenly contested. Samot Powder and adhesives are used as consumables. The denial of credit in this regard is also not very keenly contested. Contest is, however, made of M.S. Rod, beam, channel and angles used as support for the furnace in which glass is melted. The denial was based on the strength of the Tribunal's decision in the case of M/s. Indo Rama Synthetics ltd. vs. CCE [1996 (88) ELT 277 (T). The Tribunal held that such steel structures could not be taken to be component parts of accessories of the machineries. The prima-facie view held was that modvat credit under Rule 57Q was not available. On perusal, I find that this order was made on a stay application and cannot be said to have any precedential value. Shri Ravindran relies upon the later decision reported in 2000 (122) ELT 197 (Tri) [CCE Raipur vs Bhilai Engg. Corpn.] in which similar goods in identical circumstances were held to be eligible.
3. There is a difference between modvat credit on capital goods and modvat credit on inputs. In the case of latter there are two conditions. Firstly, the inputs must be used in the manufacture of the final goods and secondly those final goods must be cleared on payment of duty. The situation is different in Rule 57Q. The definition does not only allow complete machinery but would also allow components, spares, accessories of machinery. It also covers pipes and tubes used to convey the input goods. If certain goods are used to support the furnace, then the supporting material would become component parts of the furnace. In making the interpretation of the Rule, the Commissioner committed an error. His orders as far as it relates to denial of credit amounting to Rs. 24,673.40 are set aside and in their respect the appeal is allowed. The denial of credit to the extent of Rs. 1737 is upheld. Finding that there were no grounds for imposition of penalty, the penalty is remitted in full. Appropriate relief is ordered.
(Dictated in Court)