1994 (12) TMI 243

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....60.20 and Rs. 1,616.44 respectively. In addition, a penalty of Rs. 5,000/- was imposed under the earlier Order. The duty demanded is on account of disallowance of Modvat Credit taken by them in respect of electrodes, wedges and barrels in the former case and electrodes in the latter case. It was held that the electrodes are tools and the barrels and wedges are equipment and accordingly not eligible for Modvat benefit in view of the specific exclusion in the Explanation under 57A. The longer period of limitation under Rule 57-I (1) was invoked in both the cases on the ground that there was suppression of facts regarding the actual nature and use of the items in question.' 2.  Appellants (Respondents in this Application) Learned Couns....

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.... that the items were not entitled to modvat credit being of the excluded category. It has been contended by the Appellants that barrels and wedges are consumable items and are used only for one operation. Electrodes are also consumed during the operation. The Department had issued certain clarifications that electrodes are eligible for availment of credit. Even if it is felt by the Department that only certain types of electrodes can be treated as eligible inputs it cannot be taken that the Appellants were aware that the electrodes used by them were ineligible for credit and with that knowledge, they had availed inadmissible credit. The same holds good for barrels and wedges. Accordingly, we hold that irrespective of the acceptability or ot....

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....e modvat credit was invokable. 7. Learned Consultant Shri P.R. Biswas, opposing the contention of the learned JDR submits that the questions involved/raised are not questions of law. In the opinion of the Respondents, three inputs are eligible 'inputs' and do not fall within the excluded categories of inputs under Rule 57A. Such an opinion is based on the facts and circumstances regarding the nature, use and function of the inputs. There is no question of a doubt. It is for the department at the field level to study the nature, function and use of the inputs and arrive at a conclusion whether they fall under the excluded categories of inputs. It is purely hypothetical for the department to assume that a particular input is of an exc....