1999 (10) TMI 328 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit under Rule 57Q for steel wire rods.

Analysis:
The dispute in this case revolves around the admissibility of Modvat credit under Rule 57Q for steel wire rods. The Assistant Commissioner initially allowed the credit based on a Tribunal decision in a similar case. However, the Commissioner (Appeals) denied the credit, citing Rule 57Q(3) which disallows credit for items received before a specific date. The Commissioner relied on a Tribunal decision in another case to support this denial. The Judge considered both sides' arguments and examined relevant precedents to reach a decision.

Upon reviewing the Tribunal's decision in C.C.E. v. Nova Udyog, the Judge noted that capital goods under Rule 57Q include items that assist in the manufacturing process, not just those directly causing a change. The Tribunal in another case, C.C.E. v. Modipon Fibre Co., had considered different items, making the decision inapplicable to the present case. Additionally, the Judge referenced a Larger Bench decision in Jawahar Mills v. C.C.E., which clarified the interpretation of Explanation 1(a) regarding eligible capital goods. The Judge highlighted that the Nova Udyog case had already established the eligibility of certain equipment for Modvat credit, including material handling equipment like steel wire rope.

In conclusion, the Judge found merit in the appeal and allowed it, determining that steel wire rope qualifies for Modvat credit under Rule 57Q. The impugned order denying the credit was set aside, and the appellants were deemed eligible for any consequential benefits under the law.