9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 535 - HC - Central ExciseMODVAT Credit - Whether the Tribunal is correct in allowing Modvat credit in respect of iron and Steel products falling under Chapter 73 inasmuch as these items are not specified goods under Rule 57Q of erstwhile Central Excise Rules 1944 and are used as structural support to plant and machinery - Held that - The grievance of the Revenue is that many of the goods are not specified for capital goods under Rule 57Q during the relevant period. However, the substantial question of law raised is whether the Tribunal is correct in allowing MODVAT credit in respect of iron and steel products falling under Chapter 73 which are used as structural support to plant and machinery. The said question was considered by us in CMA No.1265 of 2014 by order dated 10.7.2014. Reliance was placed in Rajasthan Spinning and Weaving Mills Limited cited supra, wherein the Apex Court has applied the user test in a case of M.S.Angles, Beams and Channels used in the erection of machineries and held that it would become component of the same. Therefore, we are of the considered view that credit cannot be denied on the ground that the goods are not covered under the definition of capital goods under Rule 57Q as it stood before 16.3.1995. Following decision of Commissioner of Central Excise, Jaipur vs Rajasthan Spinning and Weavinig Mills Ltd 2010 (7) TMI 12 - SUPREME COURT OF INDIA - Decided against Revenue.
Issues:
1. Disallowance of MODVAT credit under Rule 57Q of the Central Excise Rules 1944. 2. Classification of goods as capital goods for availing credit. 3. Tribunal's decision on allowing MODVAT credit for iron and steel products used as structural support. Issue 1: Disallowance of MODVAT credit under Rule 57Q: The case involved an appeal against the disallowance of MODVAT credit amounting to Rs. 9,74,430 by the Revenue under Rule 57Q of the Central Excise Rules 1944. The dispute arose as the Revenue contended that certain goods used by the assessee did not bring about any change in the final product or were not used for producing or processing excisable finished products. A show cause notice was issued in this regard, leading to a series of appeals. Issue 2: Classification of goods as capital goods: The assessee claimed that the goods in question were capital goods eligible for MODVAT credit under Rule 57Q. However, the original authority disagreed, leading to an appeal before the Commissioner of Appeals. The Commissioner partially allowed the appeal, classifying some goods as capital goods while rejecting others. The Tribunal further analyzed each category of goods and concluded that most items, except an Aluminium catalyst, qualified as capital goods, thereby allowing the appeals. Issue 3: Tribunal's decision on iron and steel products as structural support: The Tribunal's decision to allow MODVAT credit for iron and steel products used as structural support to plant and machinery was challenged by the Revenue. The court framed a substantial question of law regarding the correctness of this decision. However, the court relied on precedents, including a Supreme Court judgment, to support the Tribunal's decision. It was held that the goods in question fell under the definition of capital goods under Rule 57Q and were eligible for credit, dismissing the appeal in favor of the assessee. In summary, the judgment addressed the disallowance of MODVAT credit under Rule 57Q, the classification of goods as capital goods for availing credit, and the Tribunal's decision on allowing credit for iron and steel products used as structural support. The court upheld the Tribunal's decision, citing relevant precedents and legal interpretations to support the assessee's eligibility for the credit.
|
