Customs, Excise and Gold Tribunal - Mumbai
The Indian Seamless Metal Tubes Ltd. vs Commissioner Of Customs & Central ... on 28 October, 2002
Equivalent citations: 2002(149)ELT759(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appeal is against the order of the Commissioner (Appeals) dismissing the appeal before him for failure to deposit duty roughly about half the duty that was demanded by the adjudicating authority. Having seen the written submissions filed by the appellant and the stay application filed by it, we have, with consent of the departmental representative decided to take up the appeal itself for disposal, after waiving deposit.
2. The adjudicating authority has held that modvat credit was not available under Rule 57Q on compressor oil, gear oil, heat transfer oil, hydraulic oil and quench oil that the appellant used for the manufacture of finished goods, on his view that Sub-rule (1) of Rule 57Q only specified lubricating oil as capital goods. So far as compressor oil is concerned, the decision of the Tribunal in CCE v. HPCL 1999 (112) ELT 70 that refrigeration compressor oil with primary function of lubricating pistons classifiable in the Central Excise tariff as lubricating oil would apply. Gear oil also appears to be lubricating oil use to lubricate the gears. We agree that the heat transfer oil, hydraulic oil and quench oil cannot be considered to be used for lubrication. Hydraulic oil is used for transmission of forces. Heat transfer oil appears to be same as quench oil.
3. However, it appears to us that these goods should be entitled to modvat credit as inputs under Rule 57A. They are used for the manufacture of finished goods. This is directly so in the case of quench oil and indirectly in the case of heat transfer oil and hydraulic oil. Without their use, the machinery that the appellant employees for making finished goods cannot be put to meaningful use. The appellant therefore has strong a prima facie case.
4. The appeal is accordingly allowed and the impugned order set aside. The Commissioner (Appeals) shall hear and decide the appeal on merits without insisting on any deposit. While deciding the appeal, he shall not pay heed to the prima facie view that we have taken.