2000 (9) TMI 102 - AT - Central Excise

Summary

Issues:
1. Interpretation of the exclusion clause under Rule 57A regarding Modvat credit eligibility for certain items used in manufacturing.
2. Conflict between judgments of different High Courts on the same legal issue.

Issue 1 - Interpretation of Rule 57A:
The case involved a dispute regarding the eligibility of Modvat credit for items like Foundary Flux, IRL, Mix, Refractories, and Mortar used in manufacturing. The Revenue contended that these items, being part of the furnace, were excluded from Modvat credit under Rule 57A. The Commissioner (Appeals) allowed the appeal, stating that these items did not fall under the category of machinery or equipment excluded from Modvat credit. The Commissioner relied on previous Tribunal judgments and a decision of the Calcutta High Court to support this interpretation. The Tribunal upheld the Commissioner's decision, emphasizing that the items in question were not covered by the exclusion clause of Rule 57A.

Issue 2 - Conflict of High Court Judgments:
The Revenue argued that there was a conflict between the decision of the Calcutta High Court and that of the Karnataka High Court on a similar issue. The Revenue sought a reference to the Punjab & Haryana High Court to resolve this conflict. The Tribunal, after considering the submissions, agreed with the Revenue's request and allowed the Reference Application to refer the matter to the Punjab & Haryana High Court for a decision on the conflicting views expressed by different High Courts.

In conclusion, the Tribunal clarified the interpretation of Rule 57A regarding Modvat credit eligibility for specific items used in manufacturing, ruling in favor of the assessee. Additionally, the Tribunal acknowledged the conflict between High Court judgments on a related issue and allowed a reference to the Punjab & Haryana High Court for resolution.