2015 (9) TMI 1211 - AT - Central Excise

Modvat credit allowed for essential plant items; denial upheld for Steel Wires. Appeal partially successful.

The Tribunal allowed modvat credit on items like dumpers, loaders, Emitting Electrodes, Steel Casing, Classifier Housing, and Steel Structures, citing ... Denial of MODVAT Credit - denial of credit on the ground that mines are not part of the appellant's premises and on the other ground that these goods are not covered in list of captive mines and listed in Rule 57B (2) - Held that:- Regarding parts of machineries as at Sl.No.3, 4 & 5 the Emitting Electrodes are made up of steel and are used in Electrostatic Precipitator Classifier in Pollution Control Equipment; Classifier Housing is a stationery part and is located at top of the vertical mill which are used coal mill, cement mill and raw mill. Similarly steel casings are outer covers of equipment like bag filters, Bucket Elevators. There is no dispute that these are parts of capital goods. On perusal of Board's circular No.27/110-96-TRU dt.2.12.96 it is categorically clarified that all parts and components and accessories which are used in the capital goods under Rule 57Q and even if it is classified under any other chapter heading are eligible for modvat credit. We find that in the case of CCE Hyderabad Vs India Cement (2004 (12) TMI 187 - CESTAT, BANGALORE) and ACC Ltd. Vs CCE (2005 (1) TMI 558 - CESTAT, NEW DELHI) wherein the Tribunal consistently held that parts and accessories are eligible for capital goods credit. In the appellant's own case in the case of Madras Cements ltd. Vs CCE Trichy (2006 (5) TMI 303 - CESTAT, CHENNAI) this Bench of the Tribunal has already disallowed the credit on steel wires which has attained finality. Therefore, this Bench cannot interfere with that decision and the said order has not been appealed by appellant. Accordingly, we hold the credit on steel wires are ineligible. - Decided partly in favour of assessee. Issues: Denial of modvat credit on various items under erstwhile Rule 57Q of Central Excise Rules.Analysis:1. The appellant filed an appeal against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Chennai, denying modvat credit under Rule 57Q.2. The Commissioner (Appeals) disallowed credit on dumpers and loaders, stating they are not part of the factory premises and not classified as capital goods under Rule 57Q. The appellant argued citing the Supreme Court's decision in Vikram Cement Vs CCE Indore, which clarified that all goods used in captive mines are eligible for modvat credit. Alternatively, the appellant claimed credit under Rule 57B for items like Emitting Electrodes, Steel Casing, and Classifier Housing, emphasizing their use in plant machinery.3. The appellant also defended the eligibility of Steel Structures and Steel Wires for modvat credit, citing their integral role in plant operations and relevant case laws supporting their claim.4. The Assistant Commissioner reiterated the adjudication order's findings and opposed the appellant's claims on certain items based on previous tribunal decisions.5. Upon careful consideration, the Tribunal analyzed the disputed items, emphasizing the Supreme Court's ruling on captive mines' eligibility for modvat credit. The Tribunal found dumpers and loaders used in captive mines qualified for credit. Additionally, it upheld the eligibility of Emitting Electrodes, Steel Casing, Classifier Housing, and Steel Structures for modvat credit based on their integral role in plant machinery.6. However, the Tribunal concurred with the previous decision disallowing modvat credit on Steel Wires, citing a previous final order on the same issue.7. Consequently, the Tribunal allowed modvat credit on most items except Steel Wires, partially allowing the appeal with consequential relief.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each aspect of the denial of modvat credit under Rule 57Q of the Central Excise Rules.