9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (10) TMI 94 - AT - Central ExciseManufacturers of refrigerators & compressors Not 6/97 listed the CG eligible for credit On careful reading of entry at Sl.no. 4 it was found that credit has been restricted for goods falling under SH 90.32 not for goods falling U/SH 90.31 so eligible for capital goods credit at material time
Issues: Eligibility of capital goods credit under Rule 57Q for testing equipment used in the manufacture of refrigerators and compressors.
Analysis: 1. Issue of Disallowance of Modvat Credit: The original authority disallowed Modvat credit of duty on the testing equipment received by the company, stating it was not eligible under Rule 57Q of the Central Excise Rules, 1944. The invoice described the equipment as a system consisting of various testing apparatus. The Commissioner (Appeals) examined the admissibility of capital goods credit and found the equipment to be capital goods required for manufacturing refrigerating appliances. The relevant clause under Rule 57Q excluded goods used for refrigerating and air conditioning appliances and machinery. 2. Interpretation of Rule 57Q: The company argued that the restriction on credit applied only to goods under Heading 90.32 and not to goods under Heading 90.31, to which the testing equipment belonged. They contended that the grouping of entries in the rule indicated the restriction was specific to goods under Heading 90.32. The Appellate Tribunal analyzed the language of the rule and determined that the restriction indeed applied only to goods under Heading 90.32, not to those under Heading 90.31. 3. Decision and Ruling: The Appellate Tribunal concluded that the testing equipment fell under Chapter Sub Heading 90.31, which was eligible for capital goods credit at the relevant time. Therefore, the equipment was deemed eligible for capital goods credit under Rule 57Q. The appeal filed by the company was allowed, overturning the impugned order passed by the Commissioner (Appeals). The Tribunal ordered in favor of the company, allowing the capital goods credit for the testing equipment used in the manufacturing process of refrigerators and compressors.
|
