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TMI Blog2010 (5) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... t was claimed by the Assessee that the said items comprised components, spares and accessories within the meaning of Explanation 1(d) of Rule 57Q (1) relating to capital goods. the short point involved in these appeals relates to the eligibility of the Assessee for Modvat Credit on certain capital goods which were said to have been used as components, spares and accessories in the manufacturing process of the Appellant for the period in question Held that: In order to avail of Modvat/Cenvat credit, an Assessee has to satisfy the Assessing Authorities that the capital goods in the form of component, spares and accessories had been utilized during the process of manufacture of the finished product - , in this case the Appellant was not abl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, on 31st March, 2000, the Assessee was issued show cause notice no.11 of 2000 asking it to show cause as to why the amount of Modvat Credit of Rs.8,42,843/- should not be disallowed and recovered under Rule 57U(3) of the Central Excise Rules, 1944, and why interest at the rate of 20% per annum should not be demanded under Rule 57U thereof, if the Modvat Credit wrongly availed was not paid within three months from the date of receipt of the demand notice. The Assessee was also asked to show cause as to why a penalty should not be imposed under Rule 173Q(b)(b) of the aforesaid Rules. 4. Replying to the said show cause notice, the Assessee asserted that the inputs used in or in relation to the manufacture of the final products were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, by way of Appeal No.E/108/04/MAS on 20th January, 2004, which upheld the order of the Commissioner (Appeals). Aggrieved by the order of CESTAT, the Appellant filed the present Appeals before this Court. 7. Appearing for the Appellant/Assessee, Mr. A.K. Ganguli, learned Senior Advocate, submitted that the case of the Assessee was squarely covered by the decision of this Court in Jaypee Rewa Cement vs. Commissioner of Central Excise [(2001) 8 SCC 586], wherein explosives used for the extraction of limestone for manufacture of cement were held to fall under Chapter 36 of the Schedule to CETA, 1985, and while cement comes under Chapter 25 and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Rules, 1944 and the impugned orders of the Revenue as well of the High Court were liable to be quashed. 9. On behalf of the Respondent, Commissioner of Central Excise, it was submitted by learned Additional Solicitor General, Mr. Gaurav Banerjee, that although the Assessee had claimed the benefit of the entry at serial No.5 of the Table annexed to Rule 57Q(1) in respect of the capital goods mentioned at serial nos.32 to 43, it had failed to specify the tariff heading under which their machinery/equipment, of which the subject capital goods were claimed to be accessories were classifiable, nor could they even disclose the identity of such machinery and equipment to the authorities. Mr. Banerjee also submitted that at no sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on certain capital goods which were said to have been used as components, spares and accessories in the manufacturing process of the Appellant for the period in question. 12. In order to avail of Modvat/Cenvat credit, an Assessee has to satisfy the Assessing Authorities that the capital goods in the form of component, spares and accessories had been utilized during the process of manufacture of the finished product. 13. Admittedly, in this case the Appellant was not able to identify the machinery for which the goods in question had been used. In the absence of such identification, it was not possible for the Assessing Authorities to come to a decision as to whether Modvat Credit would be given in respect of the goods in question. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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