TMI Blog1998 (7) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Rules, 1944. Commissioner of Central Excise, Raipur by impugned adjudication order dated 2nd February, 1996 allowed credit on some of the goods but denied it on certain others and imposed a penalty of Rs. 1,50,000. The total amount on which Modvat credit was disallowed was Rs. 17,37,149. Hence the present appeal. 2. Shri P.M. Parekh, General Manager of the Appellants Company appeared for the appellants before us. For the Department Shri D.K. Nayyar, JDR argued the case. 3. Representative of the appellants submitted that Modvat credit had been disallowed to them on six categories of items whose functions he explained as under :- (i) H.R. SS Plates, SS Sheets and Finished H.R. Plates - These are used for fabricatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n regarding eligibility for Modvat of storage tanks. As regards electrical goods he relied on Modi Alkalies and Chemicals v. CCE [1996 (88) E.L.T. 555]. In support of their claim for Modvat credit on Chain Pulley, Representative of Appellants relied on Tribunal decision in Madras Cements v. CCE [1996 (84) E.L.T. 369]. He also submitted that the imposition of penalty was totally unwarranted in their case as there was no question of any mala fide intent on their part. 4. Ld. JDR, Shri D.K. Nayyar, referred to the impugned order and submitted that the Commissioner had considered the function/role of each of the categories and had given his reasons for not allowing Modvat credit on each of the above items. As regards items covered by Sl. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o contend that to be considered eligible as capital goods under Rule 57Q the items have to be shown to have a close nexus to the final product and direct participation in the manufacturing process. He, therefore, submitted that unless the tests referred to in the said decision are fully satisfied the items on which Modvat credit under Rule 57Q is claimed such claim cannot be accepted. He therefore, submitted that no interference is called for in the impugned order. 6. We have carefully considered the arguments advanced on both sides. On the question of admissibility to Modvat credit under Rule 57Q of the items (i) to (vi) of paragraph 3 above, in the light of the submissions and case law referred to on both sides, we hold as under :- It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andard grade product, it has not been explained as to how they bring about any change in the substance for the manufacture of the final product. We, therefore, disallow credit on the said items. Item No. (vi) In the absence of any material to controvert the findings of the authority below, we confirm his findings. 7. As regards the contentions raised by ld. JDR on the basis of the decisions in Shanmugharaja Spg. Mills case (supra), we observe that the earlier decisions given by the Tribunal on the various items mentioned hereinabove have adopted criteria laid down in Rule 57Q. We have only followed the said criteria in deciding this Appeal. 8. As a result, we allow Modvat credit on items (i), (ii) and (iv) above. Appellants will be el ..... X X X X Extracts X X X X X X X X Extracts X X X X
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