2006 (10) TMI 246 - AT - Central Excise

Summary

Issues:
1. Prayer to dispense with the pre-deposit of duty amount confirmed.
2. Admissibility of modvat credit in respect of Conveyor Belt as capital goods.
3. Consideration of the Larger Bench decision in similar cases.
4. Time limitation for availing credit and issuance of show cause notice.

Analysis:

1. The judgment addresses the prayer to dispense with the pre-deposit of duty amount confirmed, amounting to Rs. 1,85,273. The appellant sought relief from this condition related to denying modvat credit for a Conveyor Belt as capital goods.

2. The issue of admissibility of modvat credit in respect of the Conveyor Belt was examined. Initially, the credit was allowed by the adjudicating authority, but the Commissioner (Appeals) reversed this decision based on a Larger Bench decision in a related case. The appellant argued that the Conveyor Belt, part of which was in a neighboring factory, was essential for transporting inputs to the appellant's factory, making it eligible for modvat credit as capital goods.

3. The judgment considered previous decisions by the Tribunal in cases such as Vikas Industrial Gas, Diamond Cement, and Pepsico India Holdings Ltd., where similar situations involving the extension of capital goods were deemed eligible for modvat credit. It was concluded that the part of the Conveyor Belt outside the factory premises was an extension of the capital goods within the appellant's factory, justifying the modvat credit.

4. Regarding the time limitation for availing credit and the issuance of the show cause notice, it was noted that the credit was availed in 1998, and the notice was issued in November 2003. The Deputy Commissioner found no suppression of facts by the appellants, as they regularly filed RT 12 returns. The reversal of this finding by the Commissioner (Appeals) based on the alleged suppression of the fact that part of the Conveyor Belt was outside the factory was deemed insufficient to invoke a longer period of limitation. The judgment emphasized that no mala fide intent could be attributed to the appellants for the oversight by the jurisdictional Central Excise authorities.

In conclusion, the judgment allowed the stay petition unconditionally, recognizing the appellant's prima facie case on merits and the absence of justification for invoking a longer period of limitation.