1998 (7) TMI 256 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit on blow bars, stranded wire, bottom covers, white K. Accomon L.C., and Fire crete super on capital goods.

Admissibility of Modvat Credit on Blow Bars:
The dispute centered around whether blow bars used in mines for crushing limestone were eligible for Modvat credit. The Commissioner and the Tribunal had denied the credit based on the interpretation that mining processes did not constitute the manufacturing process of cement. However, the appellant argued that explosives used in mines were permissible inputs based on a Supreme Court judgment. The definition of "factory" under Section 2(e) was crucial, as it includes not just buildings but also open land. The proximity of the mines to the factory was a determining factor, as seen in other judgments. Since this was a factual question, the matter needed further examination by the original authority.

Admissibility of Modvat Credit on Stranded Wire and Bottom Covers:
The denial of credit on stranded wire and bottom covers was based on the premise that they were used for transportation and did not contribute to the production process. The appellant contested this, stating that the issue raised was not part of the show cause notice. The Tribunal found that the cited judgment on this matter was not directly applicable to the case at hand. The location of the conveyer system in relation to the factory was a key factual aspect that needed clarification.

Admissibility of Modvat Credit on White K. Accomon L.C. & Fire Crete Super:
The Assistant Commissioner had disallowed credit on these items, citing that they fell under Chapter 38 and did not qualify as refractories under Chapter 69. However, the lack of factual information on the nature and usage of these goods in the manufacturing process hindered a definitive decision. If these items were essential for machinery operation, they could be considered parts or accessories. The Tribunal remanded the proceedings back to the Assistant Commissioner for a reasoned decision based on factual observations and after hearing the assessees.

In conclusion, the judgment addressed the admissibility of Modvat credit on various items used in the manufacturing process, emphasizing the need for a factual assessment of their role and proximity to the factory. The Tribunal highlighted the importance of legal interpretations, factual considerations, and proper reasoning in determining the eligibility of Modvat credit on capital goods.