2006 (7) TMI 38 - AT - Central Excise

Central Excise Modvat credit Cement and steel angles used in conveyor system in factory are eligible to capital goods Assessee can claim capital goods credit despite the fact that they have claimed input duty credit before lower authority

Summary

Issues:
1. Denial of Modvat credit on cement and steel angles by the appellate authority.
2. Department's appeal against denial of credit on cement and angles.
3. Eligibility of capital goods credit under Rule 57Q for cement and steel angles.
4. Dispute regarding denial of credit on cement and angles for specific periods.
5. Interpretation of Tribunal decisions regarding capital goods credit on cement and angles.
6. Admissibility of capital goods credit on steel angles for the period prior to 23.07.1996.

Analysis:
1. The appellate authority allowed Modvat credit on certain items but denied it on cement and steel angles. The denial was based on the argument that these items were not used for the manufacture of capital goods, thus not eligible for credit under Rule 57D(2).

2. The department filed appeals against the denial of credit on cement and angles, but only one appeal was pressed. The Tribunal dismissed the other appeals for lack of cause of action, as the department had no grievance regarding these items.

3. The eligibility of capital goods credit under Rule 57Q for cement and steel angles was contested. The Tribunal noted that these items were not listed for credit under Rule 57Q from 01.03.1997. The assessee's claim for capital goods credit on steel angles was supported by a Tribunal decision, but the Tribunal clarified that the decision was not applicable post 23.07.1996.

4. Appeals were made against denial of credit on cement and angles for specific periods. The Tribunal found that for some periods, these items were not eligible for capital goods credit under Rule 57Q. The admissibility of credit for other periods was debatable.

5. The Tribunal considered various Tribunal decisions cited by both parties regarding capital goods credit on cement and angles. Precedents were followed to determine the eligibility of these items for credit, with a preference for decisions supporting the denial of credit based on the nature of usage.

6. The Tribunal ruled that capital goods credit on steel angles was admissible for the period before 23.07.1996, based on Rule 57Q. The decision in a specific case supported the assessee's claim for credit on steel angles for this period, leaving the quantification of credit to the original authority.

In conclusion, some appeals were dismissed, while others were allowed for further assessment of capital goods credit on steel angles. The Tribunal's decision was based on the interpretation of relevant rules and precedents regarding the eligibility of Modvat credit on specific items for the periods in question.