TaxTMI 
TaxTMI 
2015 (11) TMI 954
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....is clarificatory and therefore restorative in nature or not? ii) Whether benefit of Modvat credit of capital goods can be denied where there is a apparent shortage? iii) Whether the Appellate Tribunal, the Appellate Commissioner and the lower authorities were justified in disallowing the credit on capital goods falling under Heading 73.25, 40.09, 82.07 of Central Excise Tariff Act (CETA), 1985, merely because they were incidentally part of goods falling under Chapter Heading 84.74 of CETA, 1985, for the period between? iv) Whether the impugned orders of the Appellate Tribunal can be sustained seeking to deny credit on tyres and tubes falling under heading 4011.00 of CETA, 1985 used in the captive mines. In the lig....
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....to 31.8.96 are eligible for Modvat credit. Primarily, the Tribunal came to hold the order of the Department that the components, spares and accessories of cement manufacturing machinery received during the period in question was covered by an earlier Final Order No.760/05 dated 25.5.05. In the said decision, before the Tribunal, it was contended by the assessee that Notification No.25/96 C.E. (NT) was clarificatory and retrospective. But the argument was rejected by the Tribunal following decision in Final Order No.760/05 and dismissed the appeal filed by the assessee. Aggrieved against the said orders, the present appeal has been preferred by the assessee/appellant. 5. Learned counsel appearing for the respondent laid much stress on Not....
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...., Trichy-1 (2013 (297) ELT 508 (Mad.)), wherein this Court has answered the issue against the Revenue. 8. A Division Bench of this Court, considering similar issue in the case of the very same assessee in the abovesaid case, has held as under :- "12. The assessee also placed reliance on the decision reported in 2010 (255) ELT 481 (Commissioner of Central Excise v. Rajasthan Spinning and Weaving Mills Ltd), wherein, the Apex Court, applying "user test" evolved in the judgment in Jawahar Mills' case, held that items used in the fabrication of chimney would fall within the ambit of "capital goods" and that the assessee was entitled to avail modvat credit in respect of the disputed items under Rule 57Q. In fact, the said decisio....
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....pting the case of the assessee. Quite apart, even going by the circular, we agree with the argument advanced by the learned counsel for the assessee that the amendment under Notification No.25/96 dated 31.8.1996 has to be read only as clarificatory and retrospective effect has to be given for availing modvat credit. In view of this reasoning, we find that capital goods itself were eligible for modvat credit under Rule 57Q. 14. Thus, in the light of the decision of this court following the Apex court decision and in the background of the circular issued by the Government of India dated 2.12.1996 that the benefit of modvat credit under Rule 57Q would be applicable to all components, spares and accessories of the specified goods, irre....
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....ot entitled to any relief. The appeal is dismissed." 11. Subsequently, a Larger Bench of the Supreme Court in the case of Vikram Cement Vs Commissioner of Central Excise, Indore (2006 (194) ELT 3 (SC) refrained to discuss Rule 57Q, which deals with credit on capital goods used as inputs. 12. However in the subsequent decision in Vikram Cement Vs Commissioner of Central Excise (2006 (197) ELT 145 (SC)), in para-5 of the said judgment, the Supreme Court observed that for availing Modvat credit on capital goods, if the mines are captive mines, they constitute one integrated unit together with the concerned cement factory. Therefore, Modvat/Cenvat credit on capital goods will be available to the assessee so long as....