1999 (7) TMI 328 - AT - Central Excise

Summary

Issues Involved: Appeal against Modvat credit allowance on disputed capital goods.

Modvat Credit on Tubes, Pipes, and Fittings:
The appeal concerned the denial of Modvat credit on tubes, pipes, and fittings of iron and steel for a specific period based on the definition under Rule 57Q(1). The respondents argued that these items were used to connect machines and maintain liquid flow, thus qualifying as capital goods. Citing precedents where Modvat credit was allowed for similar items, the Tribunal agreed with the respondents that the items were covered by the definition of capital goods and upheld the allowance of Modvat credit.

Spares/Components of H.C.L. Synthesis Furnace:
Dispute arose over the classification of spares/components of the furnace, with the department claiming one heading and the respondents another. The respondents contended that regardless of classification, the items were covered by the definition of capital goods under Rule 57Q, supported by a relevant Board's Circular. The Tribunal agreed that the classification did not affect the admissibility of Modvat credit, ruling in favor of the respondents' entitlement to the credit.

Compressed Asbestos, Fibre Jointing Sheets:
The Revenue challenged the allowance of Modvat credit on jointing sheets used to seal leakages during manufacturing processes. The respondents argued that these sheets were essential for smooth operations and qualified as capital goods. After considering both sides, the Tribunal agreed with the respondents, concluding that the jointing sheets were indeed components of plant and equipment, thus eligible for Modvat credit.

Nuts, Bolts, and Man-Hole Covers:
A dispute arose regarding the eligibility of Modvat credit for nuts, bolts, and man-hole covers, with the appellants claiming they were general goods. However, the respondents argued that these items were components of equipment for chlorine storage during manufacturing. The Tribunal sided with the respondents, allowing Modvat credit on these goods as they were integral parts of the manufacturing process.

Terminal Stamp under Sub-Heading 8504.00:
The Assistant Commissioner disallowed Modvat credit for terminal stamps, questioning their classification. The respondents provided evidence of proper classification under Heading 8504.00, arguing that the Assistant Commissioner lacked authority to reclassify the item. The Tribunal upheld the respondents' position, emphasizing that the classification could not be altered by authorities outside the manufacturer's jurisdiction, thus rejecting the Revenue's contention.

In conclusion, the Tribunal found no merit in the Revenue's appeal regarding the Modvat credit on the disputed capital goods and dismissed the appeal accordingly.