2001 (10) TMI 922 - AT - Central Excise

Summary

Issues: Modvat credit denial on specific items

The judgment deals with the denial of Modvat credit on certain items, namely Bottom Pouring Set, Roof Set and Mortar, Clay Graphite - Stopper Head, Insulating Sleeves/Calpad, Hot top powder, and Oxygen gas, under Rule 57A of the Central Excise Rules. The main issue revolves around whether these items qualify as inputs eligible for Modvat credit.

Analysis:

The appellants contested the denial of credit on the mentioned items, arguing that they had challenged the Assistant Commissioner's decision before the Commissioner (Appeals) based on precedents like the Shri Ramakrishna Steel Industries Ltd. case. However, they were not granted a personal hearing before the impugned order was passed. The appellants sought an extension of credit on these items, citing Tribunal decisions supporting their eligibility for Modvat credit.

The Departmental Representative (DR) opposed the appellants' plea, contending that the goods in question did not meet the criteria of inputs under Rule 57A of the Central Excise Rules.

Upon careful consideration, the Tribunal examined the nature and use of each item. The Bottom Pouring Set, Roof Set and Mortar, Clay Graphite - Stopper Head, Insulating Sleeves/Calpad, Hot top powder, and Oxygen gas were identified as refractory materials essential for various processes in the manufacturing stream. Refractory materials have previously been deemed eligible for Modvat credit under Rule 57A or Rule 57Q, either as inputs or capital goods, as evidenced by precedents like Steel Ingots Limited v. Commissioner of Central Excise, Indore and Kalyani Steel Ltd. v. CCE, Pune.

Moreover, the Tribunal noted that Oxygen gas was also considered an 'input' eligible for Modvat credit in previous cases, such as CCE, Chandigarh v. Shiv Industries. Given the established eligibility of the disputed items for Modvat credit, the Tribunal set aside the denial of credit and allowed the appeal in favor of the appellants.