2008 (1) TMI 282 - AT - Central Excise

Iron and steel items used for fabrication of parts of plant, so credit admissible - electrical items used for running plant, are entitled for credit - held that the credit in respect of steel wire ropes which are used in the factory is entitled for credit - credit taken on original copy of invoice without intimating to the Revenue, was rightly denied - held that after amendment in Rule 57G & T which is applicable to pending cases, credit can be denied in cases where no declaration is filed

Summary

Issues:
Appeal against denial of credit for various items including welding electrodes, iron and steel items, electrical items, pneumatic cylinder, original foil, tires and tubes, wire rope, D.A. gas, leak repair clamp, jointing sheet, calibration gas, and boric acid.

Analysis:

1. Welding Electrodes, D.A. Gas, Calibration Gas, and Boric Acid:
The issue regarding credit for these items used in machinery repair and maintenance was settled in favor of the Revenue by the Larger Bench of the Tribunal. Previous cases supported the denial of credit for welding electrodes and D.A. gas. Hence, the denial of credit for these items was upheld.

2. Iron and Steel Items:
Credit for iron and steel items like channels, angles, and plain sheets was initially denied as they were not deemed to be used in or related to the manufacture of excisable goods. However, the High Court of Rajasthan ruled in favor of the appellants in a similar case, allowing credit for these items. The Supreme Court also dismissed the Revenue's appeal, confirming the appellants' entitlement to credit for iron and steel items.

3. Electrical Items:
Credit for electrical items like sockets, switches, plugs, etc., was denied on the grounds of not being directly used in manufacturing goods. The appellants argued that these items were essential for running the plant where excisable goods were produced, thus justifying credit. However, taking credit on the original copy of the invoice without following proper procedures led to the rightful denial of credit.

4. Tires and Tubes, Wire Rope, Leak Repair Clamp, Jointing Sheet, Pneumatic Cylinder:
Credit for tires and tubes was allowed as they were considered capital goods during the relevant period. The credit for wire rope was upheld based on a Tribunal decision supporting credit for steel wire ropes used in the factory. Similarly, credit for leak repair clamp and jointing sheet, used to prevent leakage in the plant, was allowed. However, credit for the pneumatic cylinder was denied due to a failure to file a required declaration, in line with Tribunal decisions emphasizing the importance of compliance with relevant rules.

5. Conclusion:
The appeal was disposed of based on the detailed analysis of each item, with some credits being upheld while others were rightfully denied. The judgment highlighted the significance of adherence to procedural requirements and previous legal precedents in determining the eligibility for credit in excise matters.