2003 (12) TMI 550 - AT - Central Excise

Summary

Issues:
1. Eligibility for Modvat credit under Rule 57Q of the Central Excise Rules, 1944 regarding weighing instrument used for coal before feeding into the boiler.

Analysis:
The dispute in this case revolves around the eligibility of a weighing instrument, used for weighing coal before feeding into a boiler, for Modvat credit under the capital goods as per Rule 57Q of the Central Excise Rules, 1944. The Commissioner (Appeals) based the decision on the expanded definition of capital goods introduced by Notification No. 11/95-C.E. (N.T.), dated 16-3-95, stating that the benefit applies even for the period before the notification, considering it as clarificatory. However, the Revenue challenges this interpretation, citing judgments in various cases such as M/s. Bombay Oil Industries Pvt. Ltd., M/s. Instamedic International, and M/s. Britannia Ind. Ltd. The Revenue argues that a notification cannot have retrospective application and also disputes the non-acceptance of Tribunal judgments in other cases.

The core argument presented by the Revenue is the non-retrospective application of the notification and the disagreement with the Commissioner (Appeals) interpretation based on the expanded definition of capital goods. The Revenue also contests the non-acceptance of Tribunal judgments in similar cases. The judgment highlights the challenge to the appellate order due to the pendency of the Jawahar Mills Ltd. case before the Supreme Court. The Supreme Court's decision clarified the scope of capital goods before the new definition introduction, focusing on the period discussed in the Supreme Court judgment.

Consequently, the Tribunal directs to set aside the lower authorities' order and refer the matter back to the adjudicating authority for determining the eligibility in line with the Jawahar Mills case. The Revenue appeal is allowed, leading to a de novo remand to the adjudicating authority. The orders of the lower authorities are annulled, and the Assistant Commissioner/Deputy Commissioner is instructed to issue fresh orders within three months from the date of the order, ensuring adherence to the principles of natural justice.