2004 (2) TMI 551 - AT - Central Excise

Summary

Issues:
Whether the appellant is eligible for Modvat credit of duty paid on capital goods, specifically grinding wheels, used in the manufacture of engine valves during the period 23-7-1996 to 31-8-1996.

Analysis:
The appeal in question concerns the eligibility of the appellant for Modvat credit on grinding wheels used in the production of engine valves between 23-7-1996 and 31-8-1996. The Commissioner (Appeals) determined that grinding wheels, falling under Chapter sub-heading 6801.10, were not considered capital goods during this period. The Commissioner highlighted that these grinding wheels were included under Notification No. 25/96-C.E. (N.T.) effective from 1-9-1996, thereby disallowing Modvat credit for grinding wheels acquired in July 1996. The appellant acknowledged that grinding wheels were not classified as capital goods from 23-7-1996 to 31-8-1996. The appellant argued that prior to 23-7-1996, grinding wheels were considered Modvatable capital goods under Rule 173Q of the Central Excise Rules, 1944. However, grinding wheels were excluded from the definition of capital goods under Notification No. 14/96-C.E. (N.T.) on 23-7-1996, only to be reinstated under Notification No. 25/96 dated 31-8-1996, effective from 1-9-1996.

In light of the arguments presented, the Tribunal found no merit in the appeal and subsequently dismissed it. The decision was based on the acknowledgment that grinding wheels were not classified as capital goods during the relevant period, as per the notifications issued. Consequently, the appellant's claim for Modvat credit on grinding wheels used in the manufacturing process of engine valves between 23-7-1996 and 31-8-1996 was deemed ineligible, leading to the dismissal of the appeal.