2001 (7) TMI 165 - AT - Central Excise

Summary

Issues:
- Denial of Modvat credit on items listed in Annexure I
- Armoured cables not considered capital goods
- Modvat credit denied on AC Motors due to extra copy of invoice
- Filter with fan guard not granted Modvat credit
- Dispute over armoured cables as capital goods
- Eligibility of Five-way Coil for Modvat credit
- Denial of Modvat credit on spares for fluid couplings
- Cold frame sections considered capital goods
- Panel filter with fixed guard eligibility for Modvat credit
- Armoured cables at S. No. 12 & 13 denied Modvat credit
- IC Engines as capital goods for Modvat credit
- Fluid coupling Modvat credit denied due to invoice issue

Analysis:

The appeal filed by M/s. A.C.C. Ltd. concerns the denial of Modvat credit on various items listed in Annexure I. The Department observed discrepancies amounting to Rs. 7,85,309.84 in the claimed credit. The appellant argued for Armoured Cables, citing a Tribunal decision that cables are capital goods. However, the Department contended that endorsed invoices, which were used for claiming credit, were not valid under Modvat rules. The judge acknowledged cables as capital goods but ruled against credit based on endorsed invoices.

Regarding AC Motors, the dispute arose due to the use of an extra copy of the invoice for claiming Modvat credit. The appellant argued for leniency due to the new scheme's introduction, but the judge upheld the denial, citing the absence of a provision for credit based on extra invoice copies. However, Modvat credit was allowed for Hammer assembly and filter with fan guard, with the latter being considered part of pollution equipment.

The eligibility of Five-way Coil for Modvat credit was affirmed, as it was deemed necessary for production. Similarly, cold frame sections were considered capital goods, entitling them to Modvat credit. Panel filter with fixed guard was also granted Modvat credit as a part of pollution equipment. Armoured cables at S. No. 12 & 13 were deemed eligible for Modvat credit, and IC Engines were recognized as capital goods for credit purposes.

The dispute over fluid couplings centered on the invoice issue, with the appellant justifying credit based on endorsed gate passes. The judge agreed with the appellant's arguments, allowing Modvat credit on fluid couplings. Overall, the appeal was disposed of with decisions made on each item's eligibility for Modvat credit based on the arguments presented.