9911796707
TMI Blog2003 (1) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... vat scheme to capital goods, they filed declarations in terms of Rule 57T of the Central Excise Rules, 1944 and were availing benefit of Modvat credit on various capital goods used for producing or processing of the final product in their factory. 3. The appellants were issued with a show cause notice dated 20-5-96 and an Addendum to the show cause notice dated 18-8-97 proposing to disallow Modvat credit under Rule 57Q of duty paid on capital goods on grounds that :- (i) the capital goods were not used in the manufacture of iron and steel products but were used in the thermal power plant for generation of electricity; (ii) the capital goods did not satisfy the definition of capital goods; that declarations under Rule 57T were not filed in respect of certain capital goods; (iii) in respect of certain goods declarations were filed after three months; and in respect of certain goods even though declarations were filed within three months, no application was made for condonation of delay; (iv) The show cause notice invoked longer period of limitation on the ground that the appellants had willfully misstated and suppressed the fact of utilization of the capital goods in genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GVBW 2,94,570 13. Valves 89,810 14. SVSW etc. 73,890 15. Black Dia Pipe 15,603 TOTAL 98,45,330 16. Capital goods used in generation of power 21,13,308 TOTAL 1,19,58,638 C. MATERIAL HANDLING EQUIPMENT AND CONNECTED ITEMS Sl. No. Description of goods Amount of credit Disallowed (Rs.) Findings of the Commissioner for disallowance of credit 1. Fork Lift Trucks 1,20,458 (1) The items are in the nature of material handling equipments which do not have direct participation in the manufacturing process of the finished goods. (Page 8 of the order) 2. Rotating Fork 26,500 3. Tyres 68,518 4. Battery 12V 47,294 5. Cells/Battery 32,630 6. Wire rope/steel wire rope 3,89,088 7. Steel wire ropes 94,571 8. Chain slings 1,951 9. Slings 1,180 10. Wire rope slings 83,778,00 11. Conveyor belt 53,32,376 TOTAL 61,98,344 D. BEARINGS AND THEIR SPARE PARTS Sl. No. Description of goods Amount of credit Disallowed (Rs.) Findings of the Commissioner for disallowance of credit 1. Bearings 1,87,005 These items are capable of being used in different units of the plant but since these were identified in the show cause notice as mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, electrodes used for "maintenance" purposes cannot be granted Modvat credit as held by this Bench. Credit on these items will therefore be restricted and eligible to only those items, which are used in fabrication and not "maintenance" since no plea that they have not been used for maintenance has been taken before us. Therefore, credit will have to be restricted and denied on quantities used for "maintenance". (c) As regards the claim of Modvat credit on following items, Insulations and pipes, the ld. Advocate did not press for the same during the hearing. Their actual use has to be determined. H. ITEMS USED FOR INSULATION ETC. Sl. No. Description of goods Amount of credit Disallowed (Rs.) Findings of the Commissioner for disallowance of credit 1. Anabond 8,100 These items are capable of being used in different units of the plant but since these were identified in the show cause notice as materials procured for setting up power project, such goods have no direct participation in the manufacture stream of the final product. 2. Elect. Tapes 7,387 3. Insulator Tapes 25,565 4. M-Seal 6,192 5. Zoom P Dome 4,493 6. Orion-77 3,461 7. A/O cloth 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,476 These are not eligible for Modvat even under Rule 57A if these inputs are used for the manufacture of final products which are exempt from duty since appellants have also been manufacturing exempted goods. 2. Varez 1001 (Resin) 73,498 3. Zinc Ingots 16,350 4. Ferro Chrome 3,575 5. Silistic 740 6. Ivaline cure 12,848 7. Ivalite 8,325 TOTAL 1,65,812 (g) As regards non filing of declarations, in view of the amendment to Rule 57T(13) and the decisions of the Tribunal in the case of JBM Tools v. CCE, reported in 2002 (144) E.L.T. 561 and following the decisions in the case of Bill Graphic Papers Ltd. v. CCE, Pune reported in 2002 (52) RLT 1084, the matter has to be re-determined on the facts in this case. (h) As regards the claim of credit on woven sacks amounting to Rs. 2,62,844/- denied by the adjudicator, on finding that they are used for packing the by-product which may not be exempt and the interpretation of the exclusion to woven sacks has to be re-examined and credit determined on the issue whether a claim under Rule 57A in lieu of the facts so re-determined is entitled or not. (i) The appellants, have contested that the longer perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notices. The ld. Advocate pointed out the findings in the impugned order, that the Commissioner had directed the lower authority to follow the findings. We do not find this route to be available to the Commissioner. The Commissioner is at liberty to decide the matter and instruct his subordinates to follow. However, he should have given a finding on the plea made. If Show Cause Notices have been issued by the range officers answerable to the subordinate officers of the Commissioner, then either those Show Cause Notices should be transferred and decided by the Commissioner or the Commissioner should consider in such cases the plea of limitation being made and arrive at a finding of facts. If the period in the notices and the issues are covered by the earlier Show Cause Notices issued by the Range Superintendent, the plea of limitation is to be upheld. 5. In view of our findings, the credit on capital goods, which are found eligible on merits, need not be re-determined. The eligibility of credit on other inputs under Rule 57A or in Rule 57Q, along with the applicability of Rule 57T(13) has to be re-determined as regards the other items along with the plea of limitation applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
