2004 (11) TMI 239

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.... dispute in the present case relates to the eligibility of Modvat credit on the inputs that have gone into the production of machine parts on which no duty has been paid as they were captively consumed. These machine parts fall under Chapter headings 73, 84, 85, 90, 91, etc., and are used in the workshop situated in the factory of production of motor vehicles and parts thereof for maintenance and repair of capital goods and machinery, etc. There is no dispute that the capital goods falling under above-mentioned chapter headings are captively consumed inside the factory of production for repair as maintenance of the Plant & Machinery. The appellants claimed benefit of Notification No. 67/95, dated 16-3-1995 on these goods and were regularly ....

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....t involved, which came to Rs. 28,92,990/- denied the said amount by invoking the proviso to Section 11A(1), demanded interest applicable under Section 11AB and imposed a penalty of Rs. 2,89,000/- under Section 11AC of the Central Excise Act. Hence, this appeal. 4. Heard both sides. 5. The ld. SDR, Shri Ajay Saxena argued that the goods on which exemption was claimed were the final products and since the appellant enjoyed the benefit of Notification No. 67/95 on these products, Modvat credit on inputs is not available to the appellant; that the exempted goods themselves were not used in the manufacture of final products (motor vehicle/parts) but were used in the maintenance of the machinery belonging to the appellant; that the bar in N....