TaxTMI 
TaxTMI 
2007 (2) TMI 52
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....4. 2. According to the Revenue, during April 2003 to December 2003, the assessee had taken and utilized Cenvat credit of Rs. 1,49,010/- on welding electrodes falling under Heading 8311, plain plates, HR sheets, channels, angles falling under Chapter 72 and synthetic enamel (paints) falling under Chapter 32 of the schedule to the Central Excise Tariff Act, 1985, as capital goods. Since these were not covered under the definition of "capital goods" given in Rule 2(b) of the Cenvat Credit Rules, 2002, the appellant had violated the provisions of the rules by taking such credit. Show cause notice dated 27-3-2004 was, therefore, issued to the appellant proposing the demand and recovery of the amount of Rs. 1,49,010/-, imposition of penalty an....
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....of the Larger Bench in Jaypee Rewa Plant v. CCE Raipur, reported in 2003 (159) E.L.T. 553 (CEGAT-LB), which was followed in J.K. Cement Works v. CCE, Jaipur, reported in 2007 (6) S.T.R. 60 (T) = 2007 (78) R.L.T. 581 (CESTAT-Del.), the claim in respect of welding electrodes was not pursued. It is evident that in view of the decision of Jaypee Rewa Plant (LB), welding electrodes, which were used for maintenance and repairs, were not eligible for cenvat credit. So far as the claim regarding paints is concerned, admittedly, it was made on the footing that goods were covered within the definition of capital goods. The Cenvat credit was not allowed on the ground that the paints were not used as input in relation to the manufacture of sugar and mo....
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....the components, spares and accessories of the goods specified at clauses (1) and (ii) of clause (b) would also be capital goods. The words "components, spares and accessories" do not leave any scope for inclusion of the items of general nature such as, plain plates, channels, HR sheets and angles being treated as capital goods unless it is specifically shown that the goods are adapted for being used as components, spares or accessories of any of the other goods covered by sub-clauses (i) and (ii) of clause (b) of Rule 2. Reliance placed on behalf of the appellant on the ratio of Simbhaoli Sugar Mills and Malvika Steel Ltd. [1998 (97) E.L.T. 530 (Tribunal)] is misconceived because, as plained in CCE Chandigarh v. Modern Steels Ltd., reported....
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....s of any machine, for the purpose of Modvat credit, and where there is no evidence that the items were used as components of boilers, the order disallowing modvat credit would be justified. 8.1 Even in the present case, the authorities below have held that it was not shown by any corroborative material/evidence that the items, which were of generic nature, were used as components, spares or accessories of the eligible capital goods. The Commissioner (Appeals) has, therefore, rightly held that in the absence of any such evidence, they can only be considered to have been used for general repairs and maintenance of the fabrication work in the factory. 8.2 Since the cenvat credit was taken by violating the provisions of rules 2 and 3, a p....
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....to the facts and circumstances of the present case. 9. Therefore, while confirming the impugned order denying the modvat credit and directing recovery thereof and recovery of interest; the penalty amount is reduced to Rs. 10,000/- (rupees ten thousand only). The appeal is, accordingly, partly allowed. Excise Appeal No. 2459 of 2005: 10. In this appeal the appellant has challenged the order of the Commissioner (Appeals) dated 29-4-2005 upholding the order of the Assistant Commissioner made on 30-9-2004 denying Cenvat credit of Rs. 1,35,666.33, imposing penalty of the like amount and ordering interest to be charged under Section 11AB of the Central Excise Act. 11. According to the Revenue, the appellant had wrongly taken Modvat cr....
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....ioner at the behest of the executive Commissioner is wholly misconceived It transpires from the record that by order-in-appeal No. 302-CE/MRT-I/2003 dated 20-11- 2003, which was made in appeal filed against the earlier order of the adjudicating authority (Deputy Commissioner) dated 3-4-2003 the Commissioner (Appeals) had, in terms, held as under: "As discussed above, violation of Rule 173Q is clearly established and therefore, the respondent are liable to penalty. The original adjudicating may take appropriate action (sick) after following the principles of natural justice regarding imposition of penalty and interest as proposed in the impugned show cause notice Even though the word remand was not used this was a clear direction to th....