2012 (3) TMI 15 - AT - Central Excise

Denial of Modvat Credit of duty paid on the angles, channels etc. on the ground of it being used as supporting structures assessee contended that small portion of steel items were used as structures and the majority of the same were used for fabrication of capital goods - Chartered Engineer s certificate placed indicating quantum of steel items used for fabrication of capital goods - Held that - We find that the observations made by the adjudicating authority are factually incorrect, and since issue revolves around the quantum of steel items used as either structural or capital goods, we find that the said certificate is required to be re-examined by the Commissioner. Hence, we remand the matter to Commissioner for de-novo adjudication. Further, we direct the Commissioner to re-decide the other issues relatable to availability of credit in respect of welding electrodes used for repair & maintenance of P&M or the availability of capital consumption notification to the angles, channels etc. being manufactured by the appellants.

Summary

Issues:
1. Denial of Modvat Credit on steel items used as supporting structures.
2. Rejection of Chartered Engineer's certificate by the Commissioner.
3. Remand of the matter for de-novo adjudication.
4. Other minor issues related to credit availability for welding electrodes and capital consumption notification.

Analysis:

1. The Tribunal found that a major part of the demand was confirmed against the appellants by denying them the benefit of Modvat Credit on steel items used as supporting structures. The denial was based on the premise that these items were not eligible Modvatable goods according to the law declared in a specific case.

2. The appellants' advocate acknowledged the legal position but argued that most steel items were used for fabrication of capital goods, which should allow for Modvat Credit. He presented a certificate from a Chartered Engineer to support this claim. However, the Commissioner rejected the certificate, citing vague details and doubts about authenticity.

3. Disagreeing with the Commissioner's assessment, the Tribunal noted factual inaccuracies in the rejection of the certificate. They highlighted that the certificate was issued on a specific date covering the relevant period, contrary to the Commissioner's assertion. The Tribunal also pointed out that the annexures to the certificate provided comprehensive details that were overlooked by the adjudicating authority.

4. Given the central issue of determining the steel items' usage, the Tribunal decided to set aside the impugned order and remand the matter to the Commissioner for a fresh adjudication. Additionally, they directed the Commissioner to reconsider other minor issues related to credit availability for welding electrodes and capital consumption notification, emphasizing that no opinion was expressed on these matters.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal, the arguments presented by the parties, and the Tribunal's decision to remand the matter for further examination, ensuring a fair and thorough adjudication process.