1998 (2) TMI 347 - AT - Central Excise

Summary

Issues: Appeal against the order granting Modvat credit for aluminum sheets used in manufacturing plywood.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Calcutta involved a dispute regarding the eligibility of Modvat credit for aluminum sheets used in the production of plywood. The Commissioner of Central Excise, Calcutta-II challenged the order passed by the Commissioner of Central Excise (Appeals) granting Modvat credit to the respondents for the aluminum sheets. The Revenue argued that the aluminum sheets, used for pressing plywood with a Pressing Machine, should be considered as appliances falling under the Exclusion Clause of Rule 57A. The Revenue relied on previous tribunal decisions to support their claim that the aluminum sheets are not eligible for Modvat credit as they are akin to parts of machinery. In contrast, the Respondents contended that the aluminum sheets were entitled to Modvat credit under Rule 57A, citing a previous decision by the East Regional Bench in a similar case. The Respondents also argued that the aluminum sheets were considered parts of machinery and hence not excluded under Rule 57A. Additionally, they referred to a Larger Bench decision by the Tribunal that clarified the application of the Exclusion Clause of Rule 57A to plant and machinery, not their parts.

Upon careful consideration of both parties' submissions and the relevant case law, the presiding Judge noted that the issue had already been addressed in a previous order dated 30-12-1996 in the Respondents' own case. The Judge highlighted that the previous order was based on a judgment by the Calcutta High Court and distinguished the Revenue's reliance on previous tribunal decisions related to steel sheets and surface plates. The Judge emphasized that the previous decisions focused on the classification of steel sheets and plates as parts of machinery, whereas the current dispute pertained to the admissibility of Modvat credit for aluminum sheets. Furthermore, the Judge pointed out that the Larger Bench of the Tribunal had clarified that the Exclusion Clause of Rule 57A applied to plant and machinery, not their parts. Consequently, the Judge concluded that the Respondents' case was in line with the Tribunal's decision in their own case and rejected the Department's appeal based on the precedent set in the previous order.