2005 (3) TMI 663 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57Q regarding Modvat credit eligibility for capital goods installed in different premises of the same assessee.
2. Application of the principle of time-bar in relation to delayed issuance of Show Cause Notice.

Analysis:
1. The appeal revolved around the interpretation of Rule 57Q concerning Modvat credit eligibility for capital goods installed in different premises of the same assessee. The Commissioner (Appeals) held that as the Registration Certificate was issued to both units of the assessee, and they were engaged in manufacturing final products, the assessee was entitled to the Modvat credit. The amended Rule 57Q, as per Notification No. 6/97, specified that the capital goods should be used in the factory for manufacturing final goods. The argument that the capital goods were installed in a job worker's premises was rejected, emphasizing that both units were of the same assessee and had valid Registration Certificates for manufacturing final products. The judgment of Majestic Auto Ltd. was distinguished, affirming the eligibility of the assessee for Modvat credit.

2. The plea of time-bar was raised by the Counsel based on the delayed issuance of the Show Cause Notice. The Counsel pointed out that the Mahazar was drawn in 1997, and the Show Cause Notice was issued in 1999, rendering the demands time-barred. This argument was supported by referring to a Supreme Court judgment in the case of CCE, Chandigarh-II v. Bhalla Enterprises, where demands were set aside due to a delayed Show Cause Notice. The Tribunal found merit in the Counsel's plea of time-bar, further justifying the rejection of the appeal.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) regarding the eligibility of the assessee for Modvat credit on capital goods installed in different premises. The appeal was rejected based on the assessee's compliance with the amended Rule 57Q and the presence of valid Registration Certificates for both manufacturing units. Additionally, the plea of time-bar was justified in light of the delayed issuance of the Show Cause Notice, aligning with the precedent set by the Supreme Court judgment in Bhalla Enterprises.