2007 (11) TMI 227 - AT - Central Excise

Credit on Welding Electrode deniable as settled by the Larger Bench of Tribunal & therefore, the imposition of penalty is not justified - Credit on Winding Wires denied because appellant initially claimed it as inputs and subsequently, it was changed as capital goods - held that declaration filed by assessee in terms of Rule 57Q is sufficient for the purpose of extending credit on inputs u/r 57A as per decision of Larger Bench in case of Modi Rubber Ltd., the credit on Winding Wire is allowed

Summary

Issues: Denial of Cenvat Credit on Welding Electrodes and Winding Wires.

In this case, the appellant appealed against the denial of Cenvat Credit on Welding Electrodes and Winding Wires. The appellant's advocate argued that the denial of credit on Winding Wires was based on the appellant's initial claim of it as inputs, which was later changed to capital goods. The advocate referenced various legal precedents to support the argument that the denial was not justified. On the other hand, the Departmental Representative (DR) supported the findings of the Commissioner (Appeals) and cited relevant case laws to justify the denial of credit. After hearing both sides, the Member (J) agreed with the DR regarding the denial of credit on Welding Electrodes, upholding the decision based on previous Tribunal rulings. However, concerning the denial of credit on Winding Wire, the Member (J) noted that the appellant's change of declaration from input to capital goods was permissible based on a Larger Bench decision in the case of Modi Rubber Ltd. The Member (J) followed the precedent set by the Larger Bench and set aside the denial of credit on Winding Wire. Additionally, the Member (J) ruled that the penalty imposed due to the denial of credit on Welding Electrodes was not justified, as the issue had been settled by a Larger Bench decision. Consequently, the penalty was set aside, and the appeal was disposed of accordingly. The order was dictated and pronounced in open court on 2.11.2007.