1999 (12) TMI 411 - AT - Central Excise

Summary

Issues: Modvat credit eligibility under Rule 57Q of the Central Excise Rules for certain goods.

Analysis:
The case involved the eligibility of certain goods for modvat credit under Rule 57Q of the Central Excise Rules. The Respondents, manufacturers of excisable goods, had availed modvat credit for duty paid on specific capital goods during a certain period. The department sought to disallow this credit, contending that the goods were not covered under the definition of "capital goods" as per Rule 57Q. The jurisdictional Assistant Commissioner disallowed a portion of the credit and imposed a penalty. The Commissioner of Central Excise (Appeals) partially upheld the Assistant Commissioner's decision. The appeal before the Tribunal pertained to the portion of the order against the Revenue.

Upon examination, the Tribunal observed that the lower appellate authority had considered certain goods, including electric motor, LT Power Capacitor, Static Converter Supply Transformer, and electrical goods, as "capital goods" eligible for modvat credit under Rule 57Q. The Revenue argued that capacitors and electrical goods did not qualify as capital goods, but the Tribunal found no merit in this argument. The Tribunal noted that the goods in question had been previously deemed eligible for modvat credit in various cases and were supported by the Explanation to Rule 57Q. The Tribunal referenced a decision by the Tribunal's Larger Bench in Jawahar Mills Ltd. v. CCE, Coimbatore, which upheld the eligibility of similar goods for modvat credit under Rule 57Q.

After reviewing the submissions and the relevant legal precedents, the Tribunal concluded that all the disputed goods were rightfully considered as capital goods eligible for modvat credit under Rule 57Q. The Tribunal found that the Revenue's grounds for appeal were not sustainable in light of the decision in Jawahar Mills Ltd., which supported the eligibility of the goods in question for modvat credit. Consequently, the Tribunal dismissed the appeal, affirming the lower appellate authority's decision regarding the eligibility of the goods for modvat credit under Rule 57Q.