2003 (8) TMI 543 - AT - Central Excise

Summary

Issues:
1. Grant of Modvat Credit under Rule 57Q of the CE Rules for capital goods for Chlorine Evaporating plant.
2. Dispute regarding the location of the unit manufacturing liquid chlorine.
3. Proper filing of declaration under Rule 57T disclosing installation details of Chlorine Evaporation Plant.

Issue 1: Grant of Modvat Credit under Rule 57Q:
The Revenue contested the grant of Modvat Credit under Rule 57Q for capital goods for a Chlorine Evaporating plant, arguing that the units involved were separate. The Commissioner (Appeals) examined the agreement between the parties, noting the installation of the evaporator unit at SPIC-HCD by the appellants within the premises of SPIC-HCD. The Commissioner considered the interconnection of the plant by pipelines and its exclusive use by the appellants in manufacturing Epichlorohydrin. Citing relevant case laws, the Commissioner concluded that the plant at SPIC-HCD could be deemed as the factory of the appellants, making the capital goods eligible for Modvat Credit. The penalty was also vacated due to lack of suppression.

Issue 2: Dispute over the location of the unit manufacturing liquid chlorine:
The Revenue argued that the unit manufacturing liquid chlorine was not inside the factory and that the declaration did not disclose installation details properly. However, the Commissioner upheld the order, emphasizing the disclosure of the location of the Chlorine evaporation plant at SPIC-HCD by the assessee. The Commissioner considered the interconnection of the plant and its use in the manufacturing process, concluding that the capital goods were eligible for Modvat Credit based on established legal principles.

Issue 3: Proper filing of declaration under Rule 57T:
The Revenue contended that the declaration under Rule 57T did not mention the installation of the Chlorine evaporation Plant at SPIC-HCD, questioning the validity of the benefit granted. The Commissioner, after reviewing the records and arguments, affirmed the correctness of the order, highlighting the disclosure of the plant's location by the assessee and the applicability of legal precedents supporting the eligibility of capital goods for Modvat Credit. The Commissioner referenced a Supreme Court judgment and a Circular by the Central Board of Excise and Customs to support the decision.

In conclusion, the Tribunal upheld the Commissioner's order, finding it legally sound and dismissing the Revenue's appeal. The judgment reaffirmed the eligibility of capital goods for Modvat Credit based on the location and usage in the manufacturing process, in line with established legal principles and precedents.