2004 (10) TMI 397 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit on certain capital goods and spare parts.
2. Eligibility of parts of capital goods for exemption.

Analysis:
1. The appeal was against the denial of Modvat credit on certain capital goods and spare parts. The appellant argued that their claim was supported by a decision of the Tribunal and instructions of the Central Board of Excise and Customs. The first item in question was a Tank fitted on a trailer used for moving propane gas within the factory. The appellant contended that material handling equipment related to production are eligible for Modvat credit as per a decision of a Division Bench of the Tribunal. The Departmental Representative highlighted a previous rejection of a similar claim by the Tribunal in the appellant's case. However, the appellant argued that the denial was due to a lack of evidence regarding the item's use, and since the issue was covered by the Division Bench decision, the credit should be granted.

2. Regarding Pen Recorders, Light bulbs switching amplifier, Screw Compressor for air-conditioning machine, and parts programmable logic controllers, the appellant claimed that these items were parts of capital goods eligible for exemption. They referred to Circular No. A276/110/96-TRU dated 2-12-96 by the Central Board, which clarified that components, spares, and accessories of capital goods are eligible for credit under Rule 57A. The Circular stated that the scope of this entry is not restricted to specific classifications, covering all components, spares, and accessories of specified goods. The appellant argued that based on this clarification, the Revenue could not contest the availability of credit for these items.

3. The appellant also argued that the Videojet Inkjet Printer was covered by a previous Tribunal decision. All the disputed items were deemed eligible for Modvat credit. The appeal was allowed, setting aside the impugned order and granting consequential relief to the appellant.