2001 (10) TMI 788

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....hat authority also imposed a penalty of Rs. 10,000/- on the party under Rule 173Q. The appeal preferred by the party against the order of adjudication was rejected by the Commissioner (Appeals). However, the lower appellate authority set aside the penalty. Hence the present appeal filed by the assessee, aggrieved by the denial of Modvat credit. 2. Carefully examined the records and heard both sides. Ld. Chartered Accountant (C.A) Shri O.P. Agrawal has challenged the order of the Commissioner (Appeals) mainly on two grounds. He submits that the iron sheets were actually used as a replacement for the worn-out iron sheets of the platform attached to the converter, wherein refining of metal contained in scrap and alloys was carried out.....

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....en taken by the appellants in the memorandum of appeal filed with the Commissioner (Appeals) that, in case the goods could not be classified as capital goods under Rule 57Q, the same should be considered as inputs under Rule 57A. He submits that this alternative plea was not at all considered. He submits that without the aforesaid platform and, for that matter, the iron sheets, it was impossible to feed scrap and other raw materials into the converter and consequently the manufacturing process itself was impossible. Similarly, the Asbestos yarn wrappings over the pipes were meant for heat insulation to the pipes as well as for preventing blasting of the pipes. Without this precautionary measure, it was impossible to safely carry out the man....

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....nexed to Rule 57Q as the rule stood at the material time. That entry reads as under : "components, spares and accessories of the goods specified against Sl. Nos. 1 to 4 above". Admittedly the converter was an item falling under Chapter Heading 84.54 of the Schedule to the Central Excise Tariff Act and therefore the converter could squarely fall under Sl. 2 of the Table to Rule 57Q. Components, spares and accessories of the converter will of course fall under Sl. No. 5 and will be modvatable capital goods, but the question is whether the iron sheets would attract any of the expressions viz. components, spares and accessories. The appellants themselves admitted that the converter at the very time of its purchase consisted of the platform as a....