2004 (1) TMI 591 - AT - Central Excise

Summary

Issues:
1. Department's challenge against allowing Modvat credit based on photo copies of declaration under Rule 57T(1).
2. Department's challenge regarding grant of credit on control panel, laboratory items, and PVC power cables.
3. M/s. Lona Industries Ltd.'s appeal against denial of credit for PP/FPP tank under sub-heading No. 3925.10.

Issue 1: Department's Challenge on Modvat Credit based on Photo Copies

In the first appeal by the Department (E/105/2000-Mum.), the challenge was against the impugned order allowing Modvat credit of Rs. 2,03,348.27 based on photo copies of declaration under Rule 57T(1) as the original file was misplaced. The Commissioner (Appeals) had approved the credit based on the photo copies, and it was held that this decision did not require any interference. The Tribunal agreed with this reasoning, stating that in the absence of the original declaration, the credit based on photo copies was justified.

Issue 2: Department's Challenge on Grant of Credit

The Department also contested the grant of credit amounting to Rs. 37,997 on control panel, laboratory items, and PVC power cables. The Commissioner (Appeals) had relied on previous Tribunal decisions and the Supreme Court case of C.C.E. v. Jawahar Mills Ltd. (2001) to support the grant of credit. The Tribunal concurred with the Commissioner's decision, stating that based on the legal precedents and judgments, there was no basis to interfere with the order granting credit. Consequently, the Department's appeal on this issue was rejected.

Issue 3: M/s. Lona Industries Ltd.'s Appeal on Denial of Credit for PP/FPP Tank

In the appeal by M/s. Lona Industries Ltd. (E/203/2000-Mum.), the denial of credit amounting to Rs. 1,03,125 for PP/FPP tank under sub-heading No. 3925.10 was challenged. The Commissioner (Appeals) had denied the credit on the grounds that the sub-heading was not covered under Rule 57Q and did not constitute part of a machine or equipment. Despite the tanks being classified as capital goods, since they fell under the excluded sub-heading, the denial of credit was deemed appropriate. The Tribunal upheld this decision, stating that the denial of credit for such goods was correct. Additionally, the Tribunal noted the reduction of penalty from Rs. 3,50,000 to Rs. 1 Lakh by the Commissioner (Appeals) and further reduced it to Rs. 10,000 due to the amount of duty credit denied. As a result, the appeal by M/s. Lona Industries Ltd. was partly allowed, with the penalty being reduced accordingly.

In conclusion, both appeals were disposed of based on the above analyses and decisions rendered by the Tribunal in each respective issue.