2002 (4) TMI 721 - AT - Central Excise

Summary

Issues: Modvat credit eligibility for air-cooling units and compressors under Rule 57Q.

Analysis:
The appeal concerned the eligibility of Modvat credit for air-cooling units and compressors as capital goods under Rule 57Q. The Commissioner of Central Excise (Appeals) had disallowed the Modvat credit, citing specific exclusions under Rule 57Q for goods falling under certain chapter headings. The appellant, a manufacturer of ice-cream, argued that the air-cooling units were eligible capital goods based on the date of receipt of the goods, not the date of taking credit. The appellant contended that compressors used for industrial purposes should not be excluded under Rule 57Q. The appellant highlighted that compressors used in refrigerating and air-conditioning appliances for domestic use were distinct from those used for industrial purposes. The appellant emphasized the industrial nature of the compressors used in their ice-cream factory. However, the authorities upheld the exclusion of compressors used for refrigerating and air-conditioning appliances under Rule 57Q.

The Tribunal considered the arguments presented by both sides. It agreed with the appellant's position regarding the eligibility of air-cooling units as capital goods since they were received before the introduction of a specific notification. However, concerning compressors, the Tribunal found merit in the argument that compressors used for refrigerating and air-conditioning appliances were excluded under Rule 57Q. The Tribunal emphasized that the notification must be interpreted strictly without inserting or omitting any elements. Therefore, compressors used for such appliances were deemed ineligible as capital goods under Rule 57Q. Consequently, the appellant succeeded in availing Modvat credit for air-cooling units but failed in the case of compressors. As a result, the appeal was disposed of accordingly.