1999 (7) TMI 207 - AT - Central Excise

Summary

Issues:
- Modvat credit denial on goods like structures, parts of fire extinguishers, and programmable logic controller.
- Interpretation of whether cable trays are structures or accessories for Modvat credit eligibility.

Analysis:
1. The appeal challenges the denial of Modvat credit by the Commissioner of Customs & Central Excise on certain goods used in cement manufacturing. The appellant claimed credit under Rule 57T of the Central Excise Rules for duty paid on capital goods. The dispute arose from a show cause notice issued regarding the eligibility of Modvat credit on structures, parts of fire extinguishers, and programmable logic controllers. The original order rejected the credit, leading to an appeal before the Collector of Central Excise (Appeals), who upheld the decision citing a previous CEGAT judgment. The appellant contended that the equipment was integrated into the production line, warranting credit, especially for the programmable logic controller.

2. During arguments, the appellant's representative emphasized that the goods in question, such as cable trays, were essential accessories in the cement plant setup. Referring to a Tribunal decision on wires and cables, the appellant sought to establish a precedent for considering fire extinguishers as eligible for Modvat credit as well. On the other hand, the department representative contended that the appellant had classified the cable trays as structures, invoking a Tribunal judgment in a similar case involving Malvika Steel Ltd.

3. The presiding judge carefully analyzed the contentions of both parties. The appellant had declared the goods as structures in their response to the show cause notice, which raised the crucial question of whether cable trays should be considered structures or accessories for Modvat credit purposes. While acknowledging the Tribunal's decision on wires and cables as capital goods, the judge had to determine whether to follow that precedent or the judgment in Malvika Steel Ltd., which dealt with the classification of structures. The judge ultimately relied on the latter decision due to the appellant's own characterization of cable trays as structures in the initial response, leading to the dismissal of the appeal based on the interpretation of the written instruments and the prevailing classification as structures rather than accessories.