1997 (1) TMI 309 - AT - Central Excise

Summary

Issues:
Appeal against Commissioner (Appeals) order regarding Modvat credit for capital goods under Rule 57Q - Conflict of decisions on Modvat credit for Electrical Wires and Cables - Reference to Larger Bench for decision.

Analysis:
The appeal was filed against the Commissioner (Appeals) order concerning the availment of Modvat credit of capital goods under Rule 57Q. The dispute specifically revolved around the denial of Modvat credit for Electrical Wires and Cables by the Commissioner (Appeals). The appellant's representative argued that previous Tribunal decisions had allowed Modvat credit for Cables and Wires under Rule 57Q, citing specific cases to support this claim.

The Judge noted the conflicting views on the issue, with the Tribunal's Bench in question not granting Modvat credit for Wires and Cables under Rule 57Q. The Judge referenced a specific Tribunal order where it was held that wires and cables used for electricity transmission were not eligible for Modvat credit. The Judge highlighted that the definition of capital goods under Rule 57Q did not cover electric cables of the type in question. The Judge emphasized that the subsequent amendment including wires and cables as eligible capital goods should be seen as clarificatory, and Modvat credit could not be allowed for these items based on the existing definition.

Given the conflicting decisions on the eligibility of Modvat credit for Electrical Wires and Cables, the Judge decided to refer the matter to a Larger Bench for resolution. The question to be referred to the Larger Bench was whether the appellants were entitled to Modvat credit under Rule 57Q for Electrical Wires and Cables used in their factory. The Judge directed the Registry to forward the case to the Hon'ble President for the constitution of a Larger Bench to address the issue based on the conflicting interpretations and reasoning presented.

In conclusion, the judgment highlighted the disagreement in previous decisions regarding the allowance of Modvat credit for Electrical Wires and Cables under Rule 57Q. The decision to refer the matter to a Larger Bench for a conclusive determination reflects the need for clarity and uniformity in interpreting the relevant provisions of the Central Excise Rules, 1944 in such cases.