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2000 (10) TMI 387 - AT - Central Excise
Issues involved:
1. Interpretation of Rule 57A of the Central Excise Rules, 1944 regarding the treatment of "tool kit" and "jack assembly" supplied with motor vehicles as inputs for Modvat credit. Analysis: 1. The case involved a dispute over whether "tool kits" and "jack assembly" supplied with motor vehicles could be considered inputs eligible for Modvat credit under Rule 57A of the Central Excise Rules, 1944. The Assistant Commissioner initially disallowed the Modvat credit, but the Commissioner (Appeals) reversed this decision, stating that these items were essential constituents for making the motor vehicles marketable. The Revenue appealed to the Tribunal, which upheld the Commissioner's decision based on a previous judgment involving similar issues. The Revenue contended that the Tribunal's decision was contrary to Modvat rules and cited a judgment from the Patna High Court. The Respondents argued that a Larger Bench of the Tribunal had already decided in a previous case that tool kits and jack assemblies were indeed eligible for Modvat credit. The Tribunal noted the conflicting viewpoints and decided to refer the matter to the Hon'ble Allahabad High Court for clarification. 2. The Respondents, who were manufacturers of motor vehicles, had been availing Modvat credit on inputs, including tool kits and jack assembly supplied with the vehicles. The Revenue disputed the eligibility of these items as inputs for Modvat credit, citing a judgment from the Patna High Court. The Respondents argued that a Larger Bench of the Tribunal had already considered and allowed Modvat credit on tool kits and jack assembly in a previous case involving Bajaj Auto Limited. The Tribunal acknowledged the conflicting interpretations and decided to refer the matter to the Hon'ble Allahabad High Court for a definitive ruling on whether these items qualified as inputs under Rule 57A of the Central Excise Rules, 1944. 3. The Larger Bench of the Tribunal had previously examined the issue of Modvat credit eligibility for tool kits and jack assembly supplied with motor vehicles in the case of Bajaj Auto Limited. The Tribunal had considered the Patna High Court's judgment and other decisions before concluding that these items were indeed inputs under Rule 57A. However, due to the conflicting interpretations and the Tribunal's partial disagreement with the Patna High Court's decision, the matter was deemed to warrant a reference to the Hon'ble Allahabad High Court for a definitive legal opinion. The Tribunal allowed the reference application to proceed for clarification on whether tool kits and jack assembly could be treated as inputs under the relevant rule.
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