2003 (9) TMI 257 - AT - Central Excise

Summary

Issues involved:
- Disallowance of Modvat credit of duty claimed by the appellants as capital goods.
- Denial of Modvat credit on S.S. Plates used in the manufacture of Surge-Bin and Operating Hopper.
- Disallowance of Modvat credit on capital goods due to delayed filing of declaration under Rule 57T.
- Disallowance of Modvat credit on Welding Electrodes/Rods used in the factory.
- Disallowance of Modvat credits on "Cera Chem Saber Block Modules" and "Cera Chem Blankets" used on equipment.
- Disallowance of Modvat credit on Wheel and Tyre Assembly and Power Module.
- Disallowance of Modvat credit taken after a period of six months from the date of duty paying documents.
- Imposition of penalty upon the appellants.

Analysis:

1. Disallowed Modvat credit of duty claimed by the appellants as capital goods:
The Tribunal found that the disallowance of Modvat credit of Rs. 13,16,502/- was unjustified. The issue arose due to the expression 'extra copy' printed on the invoice, which was explained as a procedural lapse by the supplier. The Tribunal relied on previous decisions and provisions to rule in favor of the appellants.

2. Denial of Modvat credit on S.S. Plates used in the manufacture of Surge-Bin and Operating Hopper:
The Tribunal allowed the Modvat credit taken on S.S. Plates by following the precedent set in previous decisions. It was established that items used for fabrication of capital goods, which further contribute to the production or processing of the final product, are eligible for Modvat credit.

3. Disallowed Modvat credit on capital goods due to delayed filing of declaration under Rule 57T:
The Tribunal set aside the disallowance of Modvat credit amounting to Rs. 4,62,661/- on the ground of delayed filing of declaration. It was noted that the declaration was filed within a reasonable time frame, and there was no specific requirement for filing an installation certificate within a specified time limit.

4. Disallowed Modvat credit on Welding Electrodes/Rods used in the factory:
The Tribunal overturned the disallowance of Modvat credit on Welding Electrodes/Rods by citing previous decisions that supported the admissibility of such items as inputs under the Central Excise Rules.

5. Disallowed Modvat credits on "Cera Chem Saber Block Modules" and "Cera Chem Blankets" used on equipment:
The Tribunal ruled in favor of the appellants, setting aside the disallowance of Modvat credits on these items based on previous decisions that classified similar items as capital goods under Rule 57Q.

6. Disallowed Modvat credit on Wheel and Tyre Assembly and Power Module:
The Tribunal set aside the disallowance of Modvat credit on Wheel and Tyre Assembly and Power Module after considering the specific use of these items in Forklift Trucks and Distribution Control System, respectively.

7. Disallowed Modvat credit taken after a period of six months from the date of duty paying documents:
The Tribunal allowed the Modvat credit amounting to Rs. 18,000/-, which was taken after a period of six months due to a calculation mistake. It was clarified that the delay was not due to the bar of taking credit after six months from the date of duty paying documents.

8. Imposition of penalty upon the appellants:
Since the appeals were allowed on merits, the Tribunal found no justification for imposing penalties on the appellants and accordingly set them aside.

In conclusion, all five appeals were allowed with consequential relief to the appellants, and the impugned order was set aside.