2003 (9) TMI 615 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat credit on capital goods due to wrong classification by the supplier.

Analysis:
The issue in this case revolves around the availment of Modvat credit on capital goods based on the classification provided by the supplier. The appellant argued that due to the supplier's mistake in classifying the capital goods under a different category, they should not be denied the Modvat credit. The Assistant Commissioner acknowledged the specialized nature of the capital goods in question, stating that it should be classified differently from what the supplier indicated. The Commissioner emphasized that the correct classification is crucial for determining Modvat credit eligibility under Rule 57Q.

On the contrary, the respondent contended that the capital goods were correctly classified by the supplier under a specific heading that excluded them from availing Modvat credit. The respondent argued that the Assistant Commissioner did not have the authority to change the classification provided by the supplier. Citing a previous Tribunal decision, the respondent highlighted the importance of the jurisdiction of the Central Excise authorities over the manufacturer of the inputs in determining classification.

The Commissioner (Appeals) upheld the classification provided by the supplier, concluding that the goods fell under a heading that made them ineligible for Modvat credit under Rule 57Q. The Commissioner's decision was supported by the understanding that the supplier's classification was accurate and that the Assistant Commissioner did not have the power to alter it. Consequently, the appeal was dismissed based on the proper analysis of the issue and the limitation on the Assistant Commissioner's authority to change the classification provided by the supplier.