2000 (3) TMI 782 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit on certain original copies of invoices.
2. Disallowance of Modvat credit on specific items like S.E. Copper Wire, Transformer, Static Converter, Conduit PVC Arm Cable, etc., on the ground of not being capital goods.
3. Interpretation of capital goods under Rule 57Q of the Central Excise Rules, 1944.
4. Admissibility of Modvat credit on various items based on their classification as capital goods.
5. Precedents and judgments influencing the decision on Modvat credit eligibility.

Issue 1: Disallowance of Modvat credit on certain original copies of invoices
The appellants filed an appeal against the Commissioner's disallowance of Modvat credit on original copies of invoices. The Commissioner held that Modvat credit cannot be taken based on original invoices, which was in line with a Larger Bench decision against such practice. The appellants' counsel did not press this issue during the hearing.

Issue 2: Disallowance of Modvat credit on specific items
The Commissioner disallowed Modvat credit on items like S.E. Copper Wire, Transformer, Static Converter, Conduit PVC Arm Cable, etc., stating they were not capital goods under Rule 57Q. The appellants' counsel argued for the eligibility of Modvat credit on these items based on their usage and relevant precedents.

Issue 3: Interpretation of capital goods under Rule 57Q
The definition of capital goods under Rule 57Q was crucial in determining the eligibility of Modvat credit on various items. The Tribunal analyzed the nature and usage of each item to decide whether they fell under the definition of capital goods.

Issue 4: Admissibility of Modvat credit on specific items
The Tribunal examined each item individually, considering arguments from both sides and relevant judgments. Items like S.E. Copper Wire, Transformer, Static Converter, Conduit PVC Arm Cable, etc., were deemed as capital goods for the purpose of Modvat credit based on their usage and precedents.

Issue 5: Precedents influencing the decision
The Tribunal referred to past judgments, such as the case of Lupin Laboratories Ltd., to determine the eligibility of Modvat credit on items like centrifugal fans, blowers, transformers, and static converters. Precedents played a significant role in establishing the classification of certain items as capital goods.

In conclusion, the Appellate Tribunal CEGAT, New Delhi allowed the appeal in favor of the appellants regarding the classification of specific items as capital goods for Modvat credit. The Tribunal held that items like S.E. Copper Wire, Transformer, Static Converter, Conduit PVC Arm Cable, and others qualified as capital goods based on their usage and relevant precedents. The decision highlighted the importance of interpreting the definition of capital goods under Rule 57Q and considering past judgments to determine Modvat credit eligibility. The issue of Modvat credit based on original invoices was not pressed by the appellants in light of a recent Larger Bench decision.