1997 (8) TMI 245 - AT - Central Excise

Summary

Issues:
The judgment involves the benefit of Modvat credit for various items like Hydraulic Excavator, Dumpers, Steel Plates, Steel Castings, Furnace Oil, Lubricating Oil, and Lubricating Grease.

Hydraulic Excavator:
The appellant claimed Modvat credit for the Hydraulic Excavator used in mining limestone adjacent to the factory. The appellant argued that the mine and factory should be considered as one unit for claiming the credit under Rule 57A. However, the Tribunal held that the mining activity cannot be considered integral to the manufacturing process of cement, thus denying the Modvat credit.

Steel Plates:
The claim for Modvat credit for Steel Plates was not pressed by the appellant, leading to dismissal of the claim.

Steel Castings:
The appellant claimed Modvat credit for Steel Castings used in the limestone crusher, but no supporting facts were provided. The Tribunal directed the lower authority to re-adjudicate the matter after obtaining necessary particulars from the appellant.

Furnace Oil:
The appellant's claim for Modvat credit on Furnace Oil was rejected as it was not considered integral to the manufacturing process. The Tribunal held that unless the input is shown to be used in the manufacturing process of the finished product, the credit cannot be allowed.

Lubricating Oil:
The use of Lubricating Oil was not substantiated by the appellant to show its necessity for the manufacturing process. As no evidence was provided that the machinery would be non-functional without it, the claim for Modvat credit was denied.

Penalty:
The Tribunal set aside the penalty imposed as it was related to the eligibility of Modvat credit, which was found to be unwarranted in the circumstances of the case.

In conclusion, the appeal was partially allowed with respect to the penalty, while the Modvat credit claims for various items were either denied or required further substantiation for re-adjudication.