TMI Blog1999 (12) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Rs. 3,50,00,000/- under Rule 173Q of the Central Excise Rules. 2. The appellants were manufacturing Direct Reduced Iron classified under sub-heading 7203.00, Briquetting Iron, classified under the same sub-heading 7203.00 and Hot Rolled Coils under sub-heading 7209.00 under Central Excise Tariff Act. It appears they had taken Modvat credit under Rule 57Q for beams, channels, plain plates angles HR sheets channel, plain plates, CTD bars, corrugated sheets, paints and varnishes etc. Four show cause notices were issued for various periods for various amounts as mentioned below mentioning that Modvat credit was erroneously taken and utilised. Date of SCN Period Amount 21-12-1994 July, 1994 to Nov., 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout these supports the machineries and equipments could not function. Consequently it is argued that they form part of the plant and machinery itself. They are thus covered by Explanation 1(a) to Rule 57Q it is argued. In any case if the supports are not considered per se as plant and machinery it is further argued that they could be considered as components spare parts or accessories of the plant and machinery and could therefore, be covered under Explanation 1(b) to Rule 57Q. He also would further argue emphatically in an alternative way so to speak that these items are to be treated as inputs and in terms of provisions of Rule 57D (2) read with Notification 57/95 appellants are entitled to succeed in the appeal. He also would argue th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (86) E.L.T. 277. 6. We have considered the rival submissions carefully. Let us see from SCN stage. Let us take SCN dated 21-12-1994. It reads as under : They have taken credit on the material which is not covered under the definition of capital goods envisaged in the said Rule amounting to Rs. 30,58,810.05 and utilised the said credit towards payment of Central Excise duty. SCN 5-6-1995 reads as under : ....The assessee have contravened the provisions of Rule 57Q, 57T read with 57G of Central Excise Rules 44 in-as-much as They have wrongly taken and utilised Modvat credit on the material beam and channels CTD bars plate and corrugated sheets claiming it as capital goods. As per definition of capital goods as envisaged in R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikumaran regarding coverage of items in question under Expln. 1(b) of Rule 57Q and regarding applicability of Rule 57D and applicability of Notification 57/95 have to be considered to the facts of this case. This line of argument as has been rightly pointed out by JDR has been taken for the first time before us. Then the question would be whether we can ourselves decide the point. 7. Kerala High Court had rendered a similar question arising under the Income Tax Act in the case of CIT v. Kerala State Cooperative Marketing Federation Ltd. - 1992 (193) ITR 624 638. Following the decisions of Supreme Court cited above and agreeing with the view expressed by the Madras High Court in Brahadeswaran s case 1987 (163) ITR 680 we held that an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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