2001 (7) TMI 641 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credits on certain items under Central Excise Rules.
2. Interpretation of Rule 57T(1) regarding filing of declaration for capital goods.
3. Admissibility of Modvat credit for items used in manufacturing steel tanks.

Issue 1: Disallowance of Modvat credits on certain items:
The case involved M/s. National Standard Duncan Limited, issued a show cause notice for recovery of Modvat credits on capital goods and inputs under Central Excise Rules. The Assistant Commissioner allowed partial credit but disallowed certain amounts leading to an appeal. The Commissioner (Appeals) disallowed credits on specific items like Metdouble Dielectric, Hair Pin Hook, and Raw Material due to non-filing of declaration. An appeal was filed against this decision.

Issue 2: Interpretation of Rule 57T(1) for filing declaration:
The appellant argued that although they did not file a declaration under Rule 57T(1) for capital goods, they provided necessary information upon receipt of goods as per Rule 57T(2). The appellant contended that this intimation should suffice for the declaration requirement. However, the Tribunal rejected this argument, stating that the two provisions serve different purposes and cannot substitute each other. The Tribunal emphasized that non-filing of the declaration renders Modvat credit inadmissible.

Issue 3: Admissibility of Modvat credit for items in steel tank manufacturing:
The Revenue appealed against Modvat credit allowed on Flood Light, Chimney, and Ceramic Fibres used in manufacturing steel tanks. The Revenue argued that these items were not eligible under Rule 57Q. However, the lower appellate authority found these items essential for manufacturing activities and covered under the definition of capital goods. Citing relevant precedents, the Tribunal upheld the lower authority's decision, stating that these items were admissible for Modvat credit.

In conclusion, the Tribunal dismissed both appeals, upholding the disallowance of Modvat credits due to non-compliance with Rule 57T(1) and affirming the admissibility of Modvat credit for items essential in manufacturing steel tanks under Rule 57Q.