2001 (12) TMI 614 - AT - Central Excise

Tribunal Upholds Modvat Credit for Control Panel, Measuring Module, and Grinding Media

The Tribunal rejected Revenue's appeals regarding Modvat credit eligibility for automatic rotor control panel measuring module and grinding media. The ... Modvat/Cenvat - Modvat on capital goods Issues:1. Availability of Modvat credit on automatic rotor control panel measuring module and grinding media.2. Interpretation of Rule 57Q for Modvat credit on capital goods.3. Classification of grinding media for Modvat credit eligibility.Analysis:1. Availability of Modvat credit on automatic rotor control panel measuring module and grinding media:The case involved appeals by the Revenue against the Commissioner (Appeals) decisions allowing Modvat credit on automatic rotor control panel measuring module and grinding media. The Commissioner (Appeals) relied on previous Tribunal decisions to support the admissibility of Modvat credit for these items. The Revenue contended that these items did not meet the criteria under Rule 57Q for Modvat credit. However, the Tribunal noted that the Hon'ble Supreme Court had already ruled in favor of Modvat credit for measuring modules and control panels. Additionally, the Tribunal upheld the decisions of the Larger Bench and Division regarding the admissibility of Modvat credit for grinding media. As a result, the appeals filed by the Revenue were rejected.2. Interpretation of Rule 57Q for Modvat credit on capital goods:The Revenue argued that the automatic rotor control panel measuring module did not qualify as a capital good under Rule 57Q as it did not directly contribute to the manufacture of finished goods. Despite questioning the legality of a previous Tribunal decision, the Tribunal followed the Hon'ble Supreme Court's ruling and allowed Modvat credit for the measuring module and control panel. The Tribunal emphasized that the Supreme Court decision settled the issue regarding Modvat credit eligibility for these items.3. Classification of grinding media for Modvat credit eligibility:The Revenue contended that grinding media did not fall under the definition of machine, machinery, equipment, or apparatus as per Rule 57Q, thus challenging its eligibility for Modvat credit. However, the Tribunal upheld the decisions of the Larger Bench and Division, which favored the admissibility of Modvat credit for grinding media. Since no contradictory decision was presented, the Tribunal maintained its stance and rejected the Revenue's appeals based on the established precedents.