2013 (10) TMI 171 - HC - Central Excise

Tribunal decision on Modvat credits upheld, CI coils classification remitted, appeal dismissed

The Court upheld the Tribunal's decision to allow Modvat credit for certain items based on the retrospective application of an amendment to Rule 57T. The ... Admissibility of MODVAT Credit - Whether the Modvat credit is admissible without filing the declaration before receipt goods as statutorily requirement under the erstwhile Rule 57T – Held that:- Following Commissioner, Central Excise, Allahabad v. M/s. Hindalco Industries Ltd. [2012 (4) TMI 254 - ALLAHABAD HIGH COURT] - This Court after referring to Rule 57G and amendment made by Notification No. 7/99 dated 9th February, 1999 had held that the benefit of notification dated 9th February, 1999 would be available to all pending cases - The decision related to Rule 57G of the Rules but in our considered opinion the principle laid down in the aforesaid case squarely applies to the provisions of Rule 57T also as the amendment made by Notification dated 9th February, 1999 was in similar words. MODVAT Credit on Capital Goods - Whether Modvat credit is admissible on the capital goods falling under S.H. 7219.20 which are not recovered under the definition of capital goods - Held that:- he Tribunal had not committed any legal infirmity in allowing Modvat credit in respect of stainless steel plates, stainless steel aisis - So far as the question of Modvat credit in respect of CI coils/Plates of stainless steel was concerned we may mention here that the Tribunal had remitted the same to the Adjudicating Authority to decide as to whether they were integral part of plant and machinery or not - The Tribunal had not given any definite finding nor it had held that the Modvat credit was admissible – the question does not call for any adjudication. Issues:Admissibility of Modvat credit without filing the declaration before receipt of goods as per Rule 57T.Admissibility of Modvat credit on capital goods not falling under the definition of capital goods.Analysis:1. The appeal was filed under Section 35G of the Central Excise Act, 1944, against an order passed by the Customs, Excise and Service Tax Appellate Tribunal. The questions of law admitted by the Court pertained to the admissibility of Modvat credit without filing the necessary declaration before receiving goods and the eligibility of Modvat credit on specific capital goods not clearly defined under the relevant rules.2. The respondent, a Public Limited Company engaged in manufacturing paper and allied products, had availed Modvat credit during 1998-1999 for various items. The Adjudicating Authority initially denied credit for certain items like stainless steel plates and aisis due to lack of declaration filing and parts of PD pumps and CI coils/plates of stainless steel due to not meeting the capital goods definition. The Commissioner (Appeals) upheld this decision, but the Tribunal ruled differently on certain items based on classification and compliance with Rule 57T.3. The Court heard arguments from the Revenue's senior standing counsel, emphasizing the non-compliance with declaration requirements for Modvat credit on specific items. Referring to a previous case, the Court clarified that the amendment to Rule 57T through a notification was applicable retrospectively to pending cases, allowing the benefit of the amendment to be extended to cases like the present one. This decision was based on similar wording in the amendment to Rule 57T.4. The Court concluded that the Tribunal did not err in allowing Modvat credit for stainless steel plates and aisis based on the retrospective application of the amendment. Regarding CI coils/plates of stainless steel, the matter was remitted to the Adjudicating Authority to determine their classification as integral parts of plant and machinery. Since the Tribunal did not definitively rule on the admissibility of Modvat credit for this item, the Court found no need to address the second question raised in the appeal, ultimately dismissing the appeal due to lack of merit.