2005 (5) TMI 481 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal allowing Modvat credit on duty paid on parts of Moulds
- Eligibility of Modvat credit on components of Moulds as per Rule 57Q of Central Excise Rules, 1944

Analysis:
1. Appeal against Order-in-Appeal allowing Modvat credit on duty paid on parts of Moulds:
The appeal was filed by the Revenue against the Order-in-Appeal No. 123/04, where the Commissioner (Appeals) had permitted the Modvat credit of duty paid on parts of Moulds to a specific entity. Despite multiple instances of the Respondent not appearing for hearings, the Tribunal proceeded with the case. It was noted that the Respondents were engaged in manufacturing clocks and availed Modvat credit on duty paid on capital goods. The relevant period's Rule 57Q of the Central Excise Rules, 1944 outlined the eligibility criteria for Modvat credit, specifying goods falling under specific chapters of the Tariff Act. While the Table under Rule 57Q included "Moulds & dies" at serial No. (vi), it did not explicitly mention components or parts of Moulds. Consequently, the Tribunal set aside the Order-in-Appeal concerning Modvat credit on components of Moulds, as these were not specified in the Table, thus rendering the Respondents ineligible for such credit.

2. Eligibility of Modvat credit on components of Moulds as per Rule 57Q of Central Excise Rules, 1944:
The Tribunal's decision was based on a strict interpretation of Rule 57Q and the Table provided therein. While the Table included Moulds & dies as eligible for Modvat credit, the absence of a specific mention of components or parts of Moulds led to the conclusion that such components were not covered under the credit scheme. The Tribunal emphasized that since the Rule did not explicitly list components of Moulds, the Respondents could not avail Modvat credit on duty paid for these components. Therefore, the decision was made to set aside the Order-in-Appeal allowing Modvat credit on Mould components, maintaining that the Respondents were not entitled to such credit as per the provisions of Rule 57Q of the Central Excise Rules, 1944.

In conclusion, the Tribunal disposed of the appeal by disallowing the Modvat credit on components of Moulds, highlighting the importance of strict adherence to the specified criteria outlined in the relevant rules and tables governing such credits in excise matters.