2003 (7) TMI 563 - AT - Central Excise

Cenvat/Modvat - Requisite declaration not filed by appellant in respect of input Phospho Gypsum

Summary

Issues:
1. Credit denial on High Chrome Grinding Media
2. Credit denial on lubricants and water treatment chemicals
3. Denial of credit on various items as parts of structurals
4. Denial of credit on SGR Motor
5. Credit denial on LDO and Lubricants based on IOCL invoices
6. Denial of credit on Phospho Gypsum

Analysis:

Issue 1: Credit denial on High Chrome Grinding Media
The Tribunal held that the denial of credit on High Chrome Grinding Media was not sustainable. The appellant's declaration under Rule 57Q was deemed sufficient for extending Modvat credit. Therefore, the appellants were found entitled to a credit totaling Rs. 11,98,787.

Issue 2: Credit denial on lubricants and water treatment chemicals
The Tribunal ruled that the credit of Rs. 1,60,936 on lubricants and Rs. 84,497 on water treatment chemicals was admissible to the appellant based on similar grounds as the High Chrome Grinding Media issue.

Issue 3: Denial of credit on various items as parts of structurals
Regarding items like Wear Plates, Steel Plates, and others, the Tribunal found that while the appellants claimed these were parts of machinery, their exact use had not been satisfactorily explained. The matter was remanded to the jurisdictional Assistant Commissioner/Deputy Commissioner for a fresh decision after allowing the appellants an opportunity to provide further evidence.

Issue 4: Denial of credit on SGR Motor
The denial of credit amounting to Rs. 6,462 on SGR Motor was upheld by the Tribunal, citing a precedent decision. The jurisdictional Assistant Commissioner/Deputy Commissioner was directed to consider potential penal action against the appellants.

Issue 5: Credit denial on LDO and Lubricants based on IOCL invoices
The credit of Rs. 2,67,903 on LDO and Rs. 52,309 on Lubricants, availed based on IOCL invoices, was allowed as the ground for denial was not raised in the show cause notice.

Issue 6: Denial of credit on Phospho Gypsum
For the credit denial on Phospho Gypsum, the matter was remanded for a fresh decision by the jurisdictional Assistant Commissioner/Deputy Commissioner in light of specific Tribunal decisions and relevant circulars.

In conclusion, the Tribunal held that credit on High Chrome Grinding Media, Water Treatment Chemicals, LDO, and Lubricants was admissible. The issue of items considered parts of structurals but claimed as parts of machinery was to be re-evaluated. The credit denial on SGR Motor was upheld, and specific directions were given for the reconsideration of credits based on IOCL invoices and Phospho Gypsum. The appeals were disposed of accordingly.