1999 (7) TMI 268 - AT - Central Excise

Summary

Issues:
- Appeal against duty demand on rubber sheets
- Eligibility of rubber sheets for Modvat credit under Rule 57Q

Analysis:
1. Duty Demand on Rubber Sheets:
The appeal was filed against the duty demand of Rs. 3651.00 on rubber sheets falling under Heading 4008/29. The Order-in-Original, which confirmed the duty demand, was upheld by the Order-in-Appeal No. 172/98. The denial of Modvat credit on the rubber sheets was based on the argument that they could not be considered as components or spare parts of any capital goods.

2. Eligibility for Modvat Credit under Rule 57Q:
During the hearing, the appellant's representatives argued that the rubber sheets were not ordinary but were rubber sheet gaskets used as components in their ten equipments in the manufacturing plants. They provided a certificate from their Chief Manager (Mechanical) supporting this claim. The representatives highlighted that without these rubber sheet gaskets, caustic soda could not be manufactured in their plants. They also emphasized that the rubber sheets were cost-effective as they were cut to size and used for maintenance purposes. Drawing parallels with a previous Tribunal decision regarding LDPE black lay flat tubing, the appellant's representatives contended that the rubber sheets should qualify for Modvat credit under Rule 57Q.

3. Adjudication and Decision:
The learned DR representing the respondents argued that since the received items were not gaskets cut to size, they could not be considered as components of plants and equipments eligible for Modvat credit under Rule 57Q. Both the Order-in-Original and the Order-in-Appeal were defended as speaking orders providing reasoned decisions.

4. Judgment and Conclusion:
After considering the submissions and records, the Judge found that the rubber sheets were indeed used as gaskets for maintenance purposes in the manufacturing process of caustic soda. Drawing parallels with the case of Synthetics and Chemicals Ltd., where similar items were held eligible for Modvat credit after being cut to size, the Judge concluded that the rubber sheets in question were eligible for Modvat credit under Rule 57Q. Consequently, the Order-in-Original and the Order-in-Appeal were set aside, and the appeal was allowed with consequential relief granted to the appellants.