2004 (1) TMI 270 - AT - Central Excise

Summary

Issues: Availability of Modvat credit on capital goods - Steel Tanks manufactured and captively used without payment of duty.

Analysis:
The appeal concerns the availability of Modvat credit on steel tanks used by the appellants without duty payment, in accordance with Notification No. 67/95-C.E. The Commissioner (Appeals) denied the credit, citing that the goods did not qualify as capital goods under Rule 57Q at the relevant time, following the precedent set in Jindal Polyester v. CCE. The appellant argued that the goods were eligible for credit under Rule 57Q, referencing cases like Dabur India Ltd. v. CCE and Board Circular No. 276/110/96-TRU to support their claim.

The Tribunal examined the facts and found that the storage tanks in question did not meet the definition of capital goods under Rule 57Q at the time. The appellant's reliance on Serial No. 5 of the table under the Rule was deemed invalid, as it only allowed credit for components specified in Serial No. 1 to 4, which did not include the storage tanks. The Board Circular referenced by the appellant clarified that parts eligible for Modvat credit must be used with capital goods classifiable under any chapter, which was not the case here as the tanks were not classified as capital goods and were under Chapter 7309, not covered by Rule 57Q.

The Tribunal concluded that the precedents cited by the appellant were not applicable to their case based on the facts presented. Therefore, the impugned order denying Modvat credit on the steel tanks was upheld, and the appeal was dismissed.