2014 (10) TMI 801

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....nder Chapter Nos.76,26,28,38 & 81 of Schedule to the Central Excise Tariff Act, 1985. On verification of RT 12 submitted by the assessee for the months of July 1995 to November 1995, it was noticed that they have taken credit of duty in RG 23C Registers. 3. According to the Jurisdictional Superintendent, the goods referred above do not either bring about any change in the material used in the manufacture of final product or are used for processing of excisable finished product. As such the credit taken on the goods as "capital goods" is in contravention of the provisions of Rule 57Q of Central Excise Rules 1944. 4. Consequently, a show cause notice was issued on 26.12.1995. Reply was submitted on 23.2.96 stating that the capital goods is ....

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....the worn out/broken parts of the kiln shell eligible to modvat as kiln is a part of the plant in the factory. The ratio of the said decision was followed in the case of Gangeshwar Ltd vs CCE, Meerut, reported in 2002 (150) ELT 242. In respect of the very same appellant the Hon'ble Tribunal, Chennai-2001 (136) ELT 182 has held that the impugned items in questioin are eligible for modvat credit. Hence I hold that they are entitled for modvat credit. 8. Against which, the Department went on appeal before the Tribunal and contended that M.S. Flats, Plates and Angles (Chapter 73 of the CETA Schedule) used by the assessee for replacing worn out parts of their electrolytic cell during the period July to November 1995 were eligible for capital....