2002 (8) TMI 535 - AT - Central Excise

Court rejects appeal on Modvat credit for Gas Pressure Spring & Loaded Source P.M.-147 under Rule 57Q.

The appeal challenging the denial of Modvat credit on Gas Pressure Spring and Loaded Source P.M.-147 was rejected by the court. The Deputy Commissioner ... Modvat/Cenvat - Modvat on capital goods Issues: Denial of Modvat credit on Gas Pressure Spring and Loaded Source P.M.-147 by Deputy Commissioner; Rejection of appeal by Commissioner (Appeals); Eligibility of Modvat credit under Rule 57Q for the items in question.Analysis:1. The Deputy Commissioner of Central Excise denied the appellants Modvat credit on Gas Pressure Spring and Loaded Source P.M.-147, categorizing them as capital goods under Rule 57Q of Central Excise Rules, 1944. He argued that Flat Springs are parts of dies, making them ineligible for credit as per the specified Table. Additionally, he deemed the Loaded Source as an inorganic chemical, not qualifying as a spare, component, or accessory for Modvat credit under Rule 57Q.2. The Commissioner (Appeals) upheld the original order, leading to the current appeal. The appellant argued that the Flat Spring, being part of the die used in the manufacturing process, should be eligible for Modvat credit under Rule 57Q. However, the judge found no merit in this argument, emphasizing that only parts, components, and spares of specific items listed in the Table are eligible for credit.3. Regarding the Loaded Source, the appellant contended that it is an integral part of the Nucleometer used for measuring film thickness, falling under a different tariff heading than classified by the authorities. The judge highlighted the need to consider the nature and function of the Loaded Source in the manufacturing process to determine its eligibility for Modvat credit. Due to inadequate examination by lower authorities, the case was remanded for fresh consideration, while the appeal concerning the Flat Spring was rejected.4. The Cross objections filed by the respondents were disposed of in similar terms, aligning with the decisions made in the main appeal. The judgment emphasized the importance of a thorough assessment of items' nature and function in the manufacturing process to determine their eligibility for Modvat credit under Rule 57Q.