TaxTMI 
TaxTMI 
2004 (12) TMI 115
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....ent of Modvat credit availed by M/s. Bellary Steel & Alloys Ltd. (hereinafter referred to as 'M/s. Bellary Steel' in short or 'the assessee') in respect of the inputs like HR sheets, Angles, Channels, Joists, Rounds, etc. used in the fabrication and erection of technological structure. The final product manufactured by M/s. Bellary Steel is Iron and Steel. The Deputy Commissioner of Central Excise, Bellary Division, disallowed the credit to the tune of Rs. 3,92,86,820/- and also imposed penalty of Rs. 4,00,000/- under Rule 173Q on M/s. Bellary Steel. Aggrieved over the order of the Deputy Commissioner, the assessee appealed to the Commissioner (Appeals) who passed the impugned order. The Commissioner (Appeals) held that the inputs like HR P....
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....nbsp; Blast furnace and its support and ancillary structurals (2) Gas Cleaning Plant (3) Conveyor (4) Crane supports. He urged that the only issue involved in the present appeal is whether the assessee can be denied the benefit of Modvat credit on duty paid inputs utilised in the manufacture/fabrication of capital goods and supporting structure, since they have been embedded to the earth and become non-excisable goods. It was submitted that the provisions of Rule 57Q of the Central Excise Rules do not prescribe that the capital goods embedded to earth being entitled to the Modvat credit. In the assess....
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....re also capital goods and the fact that they are embedded to the earth is not a sound reason for denying the Modvat credit on the inputs used. In the case of Mahalakshmi Glass Works Ltd. v. CCE, Mumbai - 1999 (113) E.L.T. 558 (T), it was held that there is no requirement in Rule 57Q that for credit to be taken on part of the capital goods, the "capital goods" themselves must be liable to duty. Hence the Commissioner (Appeals)'s reasoning that out of all the inputs the assessee manufactured non-excisable goods which are embedded to earth and hence no Modvat credit can be given, is not correct. In the case of Lloyds Metals & Engineers Ltd. v. CCE & C., Nagpur - 2002 (50) RLT 109 (CEGAT - Mum.), the above decision has been reiterated. In the c....