2001 (3) TMI 607 - AT - Central Excise

Summary

Issues:
1. Eligibility of Boron Nitrate suspension and ceramic evaporation boat for Modvat credit under Rule 57A.
2. Whether ceramic evaporation boats can be considered as capital goods for claiming Modvat credit.
3. Availability of alternative plea for claiming Modvat credit under Rule 57A or 57Q.
4. Interpretation of previous judgments by the Larger Bench regarding eligibility of inputs for Modvat credit.

Analysis:
1. The main issue in the case was the eligibility of Boron Nitrate suspension and ceramic evaporation boats for Modvat credit under Rule 57A. The Larger Bench ruled that only Boron Nitrate suspension used in the manufacture of Metallised Polyester plastic film was an eligible input, not ceramic evaporation boats. Therefore, Modvat credit was allowed only for Boron Nitrate suspension.

2. The appellant's counsel argued that even though ceramic evaporation boats were not considered eligible inputs by the Larger Bench, they should be eligible for Modvat credit as they fall under the definition of 'capital goods.' However, the Tribunal rejected this argument, stating that the plea for claiming Modvat credit on ceramic evaporation boats as capital goods was not presented before the Larger Bench that made the decision. The Tribunal emphasized that the goods claimed as inputs cannot be credited as capital goods.

3. The issue of the availability of an alternative plea for claiming Modvat credit under Rule 57A or 57Q was raised. The Tribunal noted that the alternative plea of claiming Modvat credit on the goods in question under either rule was not available to the appellants based on the observations of the Larger Bench in a previous judgment.

4. The Tribunal analyzed previous judgments by the Larger Bench regarding the eligibility of inputs for Modvat credit. It was highlighted that the observations made in a specific case did not support the appellant's contention for claiming Modvat credit on ceramic evaporation boats. The Tribunal clarified that the goods had been deemed ineligible inputs by the Larger Bench, and therefore, the appellants were not entitled to Modvat credit on ceramic evaporation boats but could claim it on Boron Nitrate suspension.

In conclusion, the Tribunal upheld the decision that the appellants were not entitled to Modvat credit on ceramic evaporation boats but could claim it on Boron Nitrate suspension as per the ruling of the Larger Bench. Consequently, the impugned order of the Commissioner (Appeals) was modified, and the appeals of the appellants were allowed to that extent.