2008 (1) TMI 769 - AT - Central Excise

Summary

Issues:
1. Credit allowed on Filter bags, Brand heaters of ESP, and parts of Wagon Loader.
2. Classification of Filter bags and Brand heaters of ESP as parts of Pollution Control equipment.
3. Eligibility of parts of Pollution Control equipment as parts and components of plant and machinery.
4. Classification and eligibility of parts of Wagon loader for Modvat credit.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi concerned the allowance of credit on Filter bags, Brand heaters of ESP, and parts of Wagon Loader. The Revenue challenged the order of the Commissioner (Appeals) which allowed the credit on these items. The Revenue contended that Filter bags and Brand heaters of ESP are parts of Pollution Control equipment and argued that such parts cannot be treated as parts and components of plant and machinery as per the erstwhile Central Excise Rules, 1944.

In response to the Revenue's arguments, the Tribunal referred to a previous case involving Jaypee Rewa Cements v. CCE, Raipur, where credit on parts of Pollution Control Equipment was allowed. The Tribunal highlighted that Pollution Control Equipment is essential for plant and machinery and cited a decision of the Apex Court regarding the eligibility of Pollution Control Equipment as part of plant and machinery. Based on this precedent, the Tribunal upheld the credit on Filter bags and Brand heaters of ESP, considering them as essential components of plant and machinery.

Regarding the credit on parts of Wagon Loader, the Revenue argued that these parts are in the negative list of eligible capital goods, thus not eligible for Modvat credit. However, the Commissioner (Appeals) classified parts of Wagon loader as components of the Wagon loader itself, which falls under Chapter 84 and is covered under the relevant rule. Consequently, the Commissioner (Appeals) deemed parts of Wagon loader eligible for Modvat credit.

In conclusion, the Appellate Tribunal found no reason to interfere with the order of the Commissioner (Appeals) and rejected the appeal filed by the Revenue. The Tribunal's decision was based on the classification of the items as essential components of plant and machinery and their eligibility for Modvat credit as per the relevant rules and precedents.

(Order dictated and pronounced in the open Court)