2000 (1) TMI 383 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit on Kent Oil Meter and Isolation Transformer Logic Control.
2. Admissibility of Modvat Credit on copper plating on M.S. Rollers.

Analysis:

Issue 1: Disallowance of Modvat credit on Kent Oil Meter and Isolation Transformer Logic Control:
The case involved appeals by the Revenue against a common order-in-appeal where the Commissioner (Appeals) had allowed Modvat credit for Kent Oil Meter and Isolation Transformer Logic Control. The Assistant Commissioner disallowed the credit, stating these items were not directly used in the manufacture of final products. The Commissioner (Appeals) reversed this decision based on Tribunal precedents. The Revenue contended that these items did not qualify as capital goods under Rule 57-Q. The Tribunal examined the functions of these items and found them integral to the manufacturing process, citing relevant Tribunal decisions supporting their eligibility as capital goods. Consequently, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal.

Issue 2: Admissibility of Modvat Credit on copper plating on M.S. Rollers:
In this issue, the Assistant Commissioner disallowed Modvat credit on copper plating on M.S. Rollers, stating it did not fall under the definition of capital goods. The Commissioner (Appeals) disagreed, allowing the credit as the rollers were part of the printing press, a capital good. The Revenue argued that the copper plating was an intermediate process not covered under Rule 57-Q. The Tribunal examined the process, noting that the job worker had paid duty on the copper plating, and the rollers were used as capital goods by the assessee. Relying on Tribunal precedents, the Tribunal held that the copper plating was covered under the normal procedure for Modvat credit. Therefore, the Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision.

In conclusion, the Tribunal dismissed both appeals by the Revenue, upholding the Commissioner (Appeals) decisions on the admissibility of Modvat credit for the items in question based on their integral role in the manufacturing process and relevant Tribunal precedents supporting their eligibility as capital goods under Rule 57-Q of the Central Excise Rules.