2002 (2) TMI 956 - AT - Central Excise

Tribunal decision on Modvat credit appeal for structural materials.

DSM SUGAR MILLS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, KANPUR

The Tribunal rejected the appeal regarding the denial of Modvat credit amounting to Rs. 1,22,601/- for structural materials used in civil foundation work, ... Modvat/Cenvat - Modvat on inputs - Duty paying documents Issues:Denial of Modvat credit for certain goods under Rule 57Q.Analysis:The appellant was aggrieved by the denial of Modvat credit amounting to Rs. 1,27,031/- for the month of May, 1995 on specific goods under Rule 57Q. The lower authorities disallowed credits for various reasons. A credit of Rs. 1,058/- was disallowed due to corrections in the invoice, but the duty amount was correctly entered without any dispute. Another credit of Rs. 3,272/- was disallowed because the relevant invoice did not bear preprinted serial numbers, which was later deemed invalid based on Tribunal decisions. The remaining credit of Rs. 1,22,601/- was disallowed as it was taken on structural materials used in civil foundation work, deemed ineligible as capital goods under Rule 57Q for Modvat purposes. The authorities below had upheld these disallowances, and the appellant had failed to effectively challenge the findings.The Tribunal analyzed each disallowed credit separately. For the credit of Rs. 1,058/-, despite corrections in the invoice, the duty amount was correctly entered, and the objection regarding the invoice meant for export was resolved with a certificate from the Central Excise Range Superintendent. The Tribunal found the credit admissible based on these reasons. Regarding the credit of Rs. 3,272/-, disallowed due to the lack of preprinted serial numbers, the Tribunal referred to previous decisions stating that such grounds were no longer valid, and thus, the credit was allowed. However, for the credit of Rs. 1,22,601/- taken on bars and rods used in civil foundation work, the Tribunal upheld the denial as the goods were considered structural materials for immovable property and not eligible as capital goods under Rule 57Q. The appellant's failure to prove that the goods were used as parts, components, or accessories of machines led to the rejection of this credit.In conclusion, the Tribunal rejected the appeal regarding the credit of Rs. 1,22,601/- taken on structural materials but allowed the appeal for the remaining credit amount. Additionally, the penalty of Rs. 5,000/- was also allowed in the appellant's favor based on the facts and circumstances of the case. The order was dictated and pronounced in open court on 4-2-2002.