2004 (12) TMI 552 - AT - Central Excise

Summary

Issues:
1. Stay of operation of Commissioner (Appeals)'s order granting CENVAT credit for glass bottles and plastic crates.
2. Applicability of Tribunal rulings in similar cases regarding Modvat credit for capital goods.

Analysis:

1. The judgment addresses the issue of the Revenue seeking a stay on the operation of the Commissioner (Appeals)'s order granting CENVAT credit for glass bottles and plastic crates, which became non-eligible for credit after a certain date. The Revenue relies on a Tribunal ruling in the case of Steel City Beverages Ltd. v. CCE, Jamshedpur, to support their argument. The learned Advocate, on the other hand, argues that a different Tribunal ruling in the case of Mukand Ltd. v. CCE, Mumbai, granted Modvat credit for a diesel generating set considered as capital goods, which is relevant to the present case. The Tribunal, after considering both arguments, agrees with the Revenue that the Mukand Ltd. case is not directly applicable to the current situation involving glass bottles and plastic crates. Therefore, the Tribunal finds the Steel City Beverages Ltd. ruling to be applicable and allows the stay application.

2. The second issue addressed in the judgment pertains to the applicability of Tribunal rulings in cases involving Modvat credit for capital goods. The learned DR distinguishes between the rulings relied upon by the Advocate, emphasizing that the Mukand Ltd. case dealt with capital goods, specifically a diesel generating set, and not with items like glass bottles and plastic crates. The Tribunal concurs with this distinction and finds that the Steel City Beverages Ltd. ruling is more relevant to the current case. Consequently, the Tribunal allows the stay application and schedules the appeal for a final hearing before the Single Member Bench due to the amount involved being less than 5 lakhs, as requested by the Counsel.

In conclusion, the judgment carefully considers the arguments presented by both sides regarding the eligibility of CENVAT credit for specific items and the applicability of relevant Tribunal rulings. By distinguishing between cases involving different types of goods and credits, the Tribunal makes a well-reasoned decision to grant the stay application based on the more directly relevant precedent.