2004 (5) TMI 441 - AT - Central Excise

Eligibility of Modvat credit on Bulldozer and Loader - Rebar Coils, CTD Bars, TOR Steel, Joists, and Cement - HELD THAT - The appellant-assessee have emphasized and confirmed that they had not availed of the credit of duty in respect of that quantity of Rebar Coils, CTD Bars, TOR Steel, Joists and Cement which were used for civil construction of their office premises, godown, etc. It is now well settled legal position and the Apex Court in the case of CCE v. Jawahar Mills Ltd. 2001 (7) TMI 118 - SUPREME COURT has held that the language used in Explanation (1) of Rule 57Q is very liberal and the capital goods can be machines, machinery, plant, equipments, apparatus, tools or appliances, the components, spare parts and accessories thereof. The various decisions cited by the ld. Advocate and ld. Consultant for the appellant-assessee confirm the eligibility to credit in respect of steel structure and various building materials and items such as Rebar coils, CTD bars, TOR Steel, Joists and Cement when used as structural support or in foundation of machineries etc. and therefore these citations are squarely applicable to the facts of their case. Thus, we are of the considered opinion that the credit would be admissible on Rebar coils, CTD bars, TOR Steel, joists and cement. We, therefore, allow the appeal filed by the appellant-assessee. We also reject the revenue appeal in Appeal and allow the credit of duty on Loaders under Rule 57Q of the rules ibid. As regards the admissibility of the Modvat credit on Bulldozer we remand the case back to the adjudicating authority and we allow the appeal of the revenue by way of remand in respect of eligibility or otherwise of the item namely, bulldozer. We also allow the appeal of the appellant in respect of Modvat credit on Rebar coils, CTD Bars, TOR Steel, Joists and Cement with consequential relief, if any to the appellant and it is ordered accordingly.

Summary

Issues Involved:
1. Eligibility of Modvat credit on Bulldozer and Loader.
2. Eligibility of Modvat credit on Rebar Coils, CTD Bars, TOR Steel, Joists, and Cement.

Summary:

1. Eligibility of Modvat credit on Bulldozer and Loader:
The Revenue filed appeals against the Order-in-Appeal Nos. 25 and 26/1998 (TRY), dated 17-3-98, challenging the allowance of credit on Bulldozer and Loader as material handling equipment. The Revenue argued that these items were used in mines and not within the factory premises, thus not qualifying as capital goods u/r 57Q. The respondent-company contended that their factory premises included the mines as per the approved ground plan under Rule 174 of the CE Rules, 1944. The Tribunal found that the Loader used for transporting limestone from mines to the crusher unit qualifies for credit as material handling equipment. However, the eligibility of the Bulldozer required verification of whether the factory included the mines as per the approved ground plan. The Tribunal remanded the case back to the adjudicating authority for this verification.

2. Eligibility of Modvat credit on Rebar Coils, CTD Bars, TOR Steel, Joists, and Cement:
The appellant-company contested the denial of Modvat credit on these items, arguing they were used as components in the construction of the plant and not for civil construction of office premises or godowns. The Tribunal noted that the appellant had not availed credit for materials used in civil construction and emphasized the liberal interpretation of capital goods u/r 57Q as established in CCE v. Jawahar Mills Ltd. - 2001 (132) E.L.T. 3 (S.C.). The Tribunal found that these items, when used as structural support or in the foundation of machinery, qualify for Modvat credit. Consequently, the Tribunal allowed the appeal of the appellant-company and granted credit on these items with consequential relief.

Conclusion:
The Tribunal allowed the appeal of the appellant-company regarding Modvat credit on Rebar Coils, CTD Bars, TOR Steel, Joists, and Cement. It also allowed the credit on Loaders but remanded the issue of Bulldozer eligibility back to the adjudicating authority for further verification. The Revenue's appeals were rejected except for the remand on the Bulldozer issue.