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of <h1>Tribunal rules wires/cables not battery parts for MODVAT credit, upholding Collector decision.</h1> The Tribunal allowed the appeal filed by the Department, setting aside the Collector (Appeals)'s decision in favor of the respondent firm. The dispute ... Modvat credit Issues:Appeal against disallowance of MODVAT Credit - Classification of insulated wires and cables as battery parts or components.Analysis:The appeal was filed by the Collector against the Order passed by the Collector of Central Excise (Appeals) where the MODVAT Credit of Rs. 2,07,200.00 was disallowed to the respondent firm. The dispute arose when the respondent claimed credit for insulated cables used in manufacturing electric storage batteries, considering them as parts falling under Chapter/Heading 85. The Department argued that these cables were not declared, making the credit inadmissible.The respondents contended that the cables were connectors for electric storage batteries, falling under Chapter/Heading 85, hence eligible for MODVAT Credit. The Assistant Collector denied this claim, but the Collector (Appeals) ruled in favor of the respondents. The Department then appealed this decision.During the hearing, the Department argued that specific declaration of items is crucial for claiming credit, stating that cables and wires cannot be classified as battery parts or components. They cited relevant legal precedents to support their stance.The Tribunal analyzed the declaration filed by the respondents, which only mentioned battery parts and other components under Chapter 85. The invoice for which MODVAT Credit was claimed pertained to insulated wires and cables, distinct from battery parts. The Tribunal emphasized that even if used as connectors, the nature of cables remains unchanged. As the declaration did not cover wires and cables, the Assistant Collector's decision was deemed lawful.The Collector (Appeals) was criticized for not addressing the lack of proper declaration for wires and cables in their decision. The Tribunal found fault with the reasoning that the Assistant Collector should have sought clarification, as wires and cables could not be considered as components of batteries. Consequently, the impugned order was set aside, and the appeal was allowed, restoring the Assistant Collector's decision to disallow the MODVAT Credit on the insulated wires and cables.
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