2003 (9) TMI 652 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit on certain items of capital goods, eligibility of disputed items for credit, interpretation of relevant declaration under Rule 57G.

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the case involved M/s. Narmada Chemature Petrochemicals Ltd. being served with a show cause notice proposing disallowance of Modvat credit on specific capital goods items, with an imposition of penalty. The Commissioner allowed credit on some items but disallowed it on others, leading to the appeal by the appellants. During the hearing, it was acknowledged that the Auto Ranging Conductivity Meter was not included in the relevant declaration under Rule 57G, resulting in the appellants not pressing their claim for credit for this item, with an indicated ineligible amount of Rs. 1,096.

The judgment referred to a Supreme Court case concerning the eligibility of disputed items for credit in the category of capital goods. The learned DR recognized the impact of the Supreme Court judgment in the case of Commissioner of Central Excise v. Jawahar Mills Ltd., where it was established that the disputed items were eligible for credit as capital goods. Upon reviewing the description of various items like FT Studs, Auto Ranging Conductivity Meter, Testing Ion Analyser, Pipe fittings, and others, it was found that these items were components of manufacturing or testing equipment and safety instruments, falling within the definition of capital goods as per the Supreme Court judgment in C.C.E. v. Jawahar Mills Ltd.

The judgment concluded that the appeal succeeded except for the Auto Ranging Conductivity Meter, which was not included in the relevant declaration, resulting in an ineligible amount of Rs. 1,096. The decision allowed the appeal with consequential relief, if any, for the eligible items, in line with the Supreme Court's interpretation of capital goods in similar cases.