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TMI Blog2015 (2) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs' so as to qualify for MODVAT credit under Rule 57A read with Rule 57B of Rules, 1944. Since there is change in provisions, therefore, for the subsequent period, having examined the terms "capital goods" and "input" in the subsequent Rules and comparing with the Rules 57A, 57B and 57Q of earlier Rule, for the purpose of present case, we do not find any substantial difference which may help the appellant so as to include 'welding electrode' within either of the aforesaid terms for claiming MODVAT/CENVAT Credit on the use of "welding electrodes" in an industrial unit engaged in production of sugar and molasses. - Decided against the assessee - CENTRAL EXCISE APPEAL No. - 51 of 2008, CENTRAL EXCISE APPEAL No. - 719 of 2012, CENTRAL EXCISE APPEAL No. - 720 of 2012 - - - Dated:- 27-2-2015 - Hon'ble Sudhir Agarwal And Hon'ble Shashi Kant, JJ. For the Appellant :- S.D. Singh, Manu Ghildyal For the Respondent :- A.S.G.I., A.K.Nigam, S.K.Misra ORDER 1. Heard learned counsels for parties and perused the record. 2. These appeals under Section 35G of Central Excise Act, 1944 (hereinafter referred to as Act, 1944 ) have come up at the instance of M/s D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. October' 1999 to February' 2000 ₹ 45191/- 2. March' 2000 ₹ 12303/- 3. January' 2002 to March' 2002 ₹ 31198/- 8. The Deputy Commissioner, Central Excise Division Rampur finding that appellant was not entitled to avail MODVAT/CENVAT Credit facility in respect to welding electrodes, and has wrongly availed the same issued show cause notice dated 23.1.2001 in respect to the benefits availed by appellant from October' 1999 to March' 2000 requiring the appellant to show cause as to why the said amount be not recovered along with interest and penalty. The appellant submitted reply on 30.1.2002. While the matter was pending another show cause notice was issued in respect to MODVAT Credit availed for the period of January' 2002 to March' 2002 which was also replied by appellant. Thereafter, Deputy Commissioner passed three separate orders to the same effect holding that appellant was not eligible and entitled to avail facility of MODVET/CENVET credit on use of weld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Government may, by notification in the Official Gazette, specifically in this behalf for the purpose of allowing credit of any duty of excise or the additional duty nder section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereafter, in this section, referred to as the specified duty) paid on the goods used in the manufacture of the said final products (hereafter, in this section, referred to as the inputs). (2) The credit of specified duty allowed under sub-rule (1) shall be utilised towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the notification issued under sub-rule (1) and subject to the provisions of this section and the conditions and restrictions, if any, specified in the said notification. (3) The Central Government may also specify in the said notification the goods or classes of goods in respect of which the credit of specified duty may be restricted. (4) The credit of specified duty under this section shall be allowed on inputs used in the manufacture of final products as well as on inputs used in or in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and whether contained in the final products or not, namely :- (i) inputs which are manufactured and used within the factory of production; (ii) paints; (iii) inputs used as fuel; (iv) inputs used for generation of electricity or steam, used for manufacture of final products or for any other purpose, within the factory of production; (v) packing materials and materials from which such packing materials are made provided the cost of such packing materials is included in the value of the final product; (vi) accessories of the final product cleared alongwith such final product, the value of which is included in the assessable value of the final product: Explanation. - For the purposes of this sub-rule, it is hereby clarified that the term 'inputs' refers only to such inputs as may be specified in a notification issued under rule 57A.] (2) The manufacturer of the final products shall not be allowed to take credit of the duty paid on the following goods, namely :- (i) machines, machinery, equipment, apparatus, tools, appliances or capital goods as defined in rule 57Q (other than those used as component parts in the manufacture of final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtinguishers falling under sub-heading No. 8424.80, 8424.91, 8424.99], 84.29 to 84.37, 84.40, 84.50, 84.52, 84.69 to 84.73, 84.76, 84.78, expansion valves and solenoid valves falling under sub heading No. 8481.10 of a kind used for referigerating and airconditioning appliances and machinery); 3 All goods falling under chapter 85 (other than those falling under heading Nos. 85.09 to 85.13, 85.16 to 85.31, 85.39 and 85.40; 4 All goods falling under heading Nos. 90.11 to 90.13, 90.16, 90.17, 90.22 (other than for medical use), 90.24 to 90.31 and 90.32 (other than of a kind used for refrigeration and airconditioning appliances and machinery; 5 Components, spares and accessories of the goods specified against S. Nos. 1 to 4 above; 6 Moulds and dies; 7 Refractories and refractory materials; 8 Tubes and pipes and fittings thereof, used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of the specified duty on capital goods [other than those capital goods covered under S. Nos. 5, 7, 10, 11 and 12 of column (2) of the Table below sub-rule (1)] and received in the factory on or after the 1st day of January, 1996, shall not be taken on a date prior to the date on which such capital goods are installed or, as the case may be, used for manufacturer or a person designated by him for this purpose. (8)Notwithstanding anything contained in sub-rule (7), a manufacturer intending to remove the capital goods from his factory for home consumption or for export, prior to their being installed or used, as the case may be, shall be allowed to take credit on the date on which such capital goods are so removed by him from his factory on payment of the appropriate duty of excise leviable thereon as provided in rule 57S. 15. First we would consider the question whether 'Welding Electrodes' can be considered to be 'input', attracting MODVAT credit under Rule 57A and 57B of Rules, 1944. 16. It is admitted case of appellant that Welding Electrodes as such have nothing to do with manufacture of 'sugar' and 'molasses' and other produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to bring within aforesaid provisions. 19. Looking to aforesaid provisions as applicable at the relevant time which is in dispute in the present appeal, we are clearly of the view that 'Welding Electrodes' would not come within the category 'inputs' so as to qualify for MODVAT credit under Rule 57A read with Rule 57B of Rules, 1944. 20. However, the aforesaid answer would cover the period of October' 1999 to March' 2000 Only. Since there is change in provisions, therefore, for the subsequent period, it would also be necessary to examine the matter in the light of amended provisions. 21. In exercise of powers under Section 37 of Act, 1944, Central Government made CENVAT Credit Rules, 2001 (hereinafter referred to as Rules, 2001 ) which came into force on 1.7.2001. Therein the MODVAT Credit was termed as CENVAT Credit and separate set of Rules were framed, namely Rules, 2001. The aforesaid Rules were superseded by CENVAT Credit Rules, 2002 (hereinafter referred to as Rules, 2002 ) which came into force on 1.3.2002. The period of January' 2002 to March' 2002, therefore, would be covered by Rules, 2001 and Rules, 2002. In Rules, 2001, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes lubricating oils, greases, cutting oils and coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production. Explanation 1. - The high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacture. 23. In Both the aforesaid Rules, 2001 and 2002, the term final product was also defined in Rule (d) and (e) respectively, but since it is pari materia, therefore, this Court quotes Rule 2(e) from Rules, 2002, which reads as under: (e) final products means excisable goods manufactured or produced from inputs, except matches; 24. Having examined the terms capital goods and inp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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