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2010 (2) TMI 500 - AT - Central ExciseCenvat/Modvat - Capital Goods - credit was denied in respect of Continuous Mixture and on Thermostat as capital goods. Held that - Continuous Mixture classifiable under heading 84.74 of CETA. As goods classified under Chapter 84 were specifically excluded from scope of capital goods by Rule assessee was not entitled to credit of duty paid on them. Further held that for the purpose of Thermostat the matter was remanded back for reconsideration. Thus no penalty imposable.
Issues:
1. Denial of credit for Continuous Mixture and Thermostat as capital goods. Analysis: The Appellant filed an appeal against the impugned order denying credit for Continuous Mixture and Thermostat as capital goods used in the production of excisable goods. The Departmental Representative argued that Continuous Mixture falls under a specific classification excluded from the definition of capital goods. The Tribunal found that Continuous Mixture is classified under Chapter 8474 and goods under Tariff Heading 84.74 are excluded from the scope of capital goods, upholding the denial of credit for Continuous Mixture. In the case of Thermostat, the Appellant contended that it is used in conjunction with the cooling mechanism of oil bath during press operation and is not specifically excluded from the definition of capital goods. The Tribunal acknowledged the Appellant's argument regarding the quantification of credit availed on Thermostat and the substantial amount denied. Therefore, the Tribunal set aside the impugned order on Thermostat and remanded the matter to the adjudicating authority for reconsideration. The Tribunal also noted that the penalty imposed was not sustainable due to interpretational differences and the remand of a substantial portion of the demand, thus setting aside the penalty. In conclusion, the appeal was disposed of with the denial of credit for Continuous Mixture upheld, while the matter concerning the credit on Thermostat was remanded for reconsideration by the adjudicating authority. The penalty imposed was set aside due to the interpretational nature of the issues involved.
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