2005 (9) TMI 376 - AT - Central Excise

Summary

Issues:
1. Appeal against the grant of Modvat credit on various items of capital goods under Rule 57Q of the Central Excise Rules, 1944 for the period March 1994 to April 1996.

Analysis:
1. Appeal No. E/141/99:
- The appeal was against the grant of capital goods credit for 24 items, most of which were used as accessories to Diesel Generating sets in the factory.
- The items were considered eligible for Modvat credit under Rule 57Q as they fell under the definition of "capital goods" as per Explanation I to sub-rule (1) of Rule 57Q.
- The lower authority's decision to grant Modvat credit on these items was upheld, except for one item, 'MS plated wire guard,' which was also deemed eligible under Clause (b) of Explanation I.
- The tariff classification of the goods was not a factor during the disputed period, and all items, except one, were previously held to be Modvatable capital goods in various cases cited by the counsel.

2. Appeal No. E/142/99:
- This appeal contested the grant of capital goods credit on 5 items, most of which were used as accessories to DG sets in the factory.
- Items 1, 2, and 3 were considered eligible for Modvat credit, while item 4, 'VCM bullet,' used for transportation and not in the factory, was denied the credit.
- The 5th item was also deemed eligible for capital goods credit under the definition provided in Explanation I.
- The appeal was allowed only to the extent of denying credit for the 'VCM bullet,' with the rest of the items qualifying for Modvat credit.

3. Appeal No. E/143/99:
- This appeal challenged the grant of capital goods credit on 14 items, with most items being supported by case law for Modvat credit under Rule 57Q.
- Items used as accessories/spares of capital goods covered by Clause (a) of Explanation I were considered eligible for credit under Clause (b) of the Explanation.
- Upon examination, all items, except two, were found to qualify for Modvat credit under Rule 57Q, leading to the dismissal of the appeal.

In conclusion, the Tribunal dismissed all three appeals, upholding the grant of Modvat credit on the majority of the items of capital goods in question, in accordance with the provisions of Rule 57Q during the relevant period.