1997 (11) TMI 281 - AT - Central Excise

Summary

Issues Involved: The denial of Modvat credit on various capital goods used in the manufacture of Vacuum Pan Sugar and molasses under Chapter 17 of the Central Excise Tariff Act, 1985.

Summary:
1. The appellants were availing Modvat scheme on capital goods but faced a show cause notice proposing denial of credit on certain items. The Assistant Commissioner disallowed a significant amount of credit, which was partially upheld by the Commissioner of Central Excise (Appeals).

2. The advocate for the appellants argued that the disputed items are indeed capital goods essential for the manufacturing process, citing precedents. The Departmental Representative supported the original findings.

3. The manufacturing process of Vacuum Pan Sugar and molasses was detailed, emphasizing the importance of precise control at every stage.

4. Items on which credit was denied:
- Measuring and Checking instruments: Essential for controlling parameters in the sugar plant, held as capital goods.
- C.I. Pulley and Conveyor belts: Considered material handling equipment and thus capital goods.
- Safety valves and Pipe Fittings: Integral parts for processing goods, eligible for credit.
- Pump with Wire Frames and Bagasse Baling Press: Used in the manufacturing process, entitled to credit.
- Space Heater and Spares for butterfly valve: Covered under capital goods definition, except for spares not declared.
- Thermic Bearing Metal: Denied credit as welding equipment, not a component part.
- Reduction Gear Box and Aluminium Device Tank: Credit available except for procedural issues.
- Rotating Machinery: Not declared in time, hence credit denied.
- Water Automat: Eligible for credit as it aids in the manufacturing process of sugar.

5. Credit was held available on all disputed items except for spares for butterfly valves, thermic bearing metal, and rotating machinery.

6. The appeal was disposed of accordingly.