TMI Blog2019 (3) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... the parts, accessories of these goods from the availment of Modvat Credit. We find that the reading of the Sr.No.5 by the Tribunal was improper and correct. The Circular would not enable the assessee in this case to avail of the credit. Though the Circular may say that the scope of this entry is not restricted to the components, spares and used under Chapters 82, 84, 85 or 90 but covers all components, spares and accessories of the specified goods irrespective of their classification, then, to that extent and without noticing the language of Table No.5, and only with the aid of this Circular, the Tribunal could not have allowed the assessee to avail the Modvat Credit. The ultimate conclusion of the Tribunal should not be entirely set aside. It is set aside only to the extent pertaining to the goods covered by chapter heading 8431 and its part (parts of conveyor) - Rest of the order of the Tribunal is upheld - appeal allowed in part. - CENTRAL EXCISE APPEAL NO.147 OF 2018 - - - Dated:- 8-3-2019 - S. C. DHARMADHIKARI M. S. KARNIK, JJ. Mr. Pradeep S. Jetly a/w Mr.J.B.Mishra for the Appellant. Mr. Prakash Shah a/w Mr. Jas Sanghavi and Ms. Divyasha Mathur I/b PDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit and in the teeth of the clear language of the provision, then, we should not disturb the order under challenge, but uphold it. Mr.Shah would submit that the appeal does not raise substantial questions of law. 6. A short statement of facts would be necessary to appreciate these arguments. 7. A show cause notice dated 1st August, 2005 was issued to the respondent/assessee demanding an amount of ₹ 52,78,864/- for the period 6th November, 1998 to 31st March, 2000 alongwith interest and proposed penalty. 8. The assessee is engaged in the manufacture of Motor Vehicles and parts thereof falling under Chapter Heading 8703 and 8708 of the schedule to the Central Excise Tariff Act, 1985. 9. During the course of its manufacturing activities, the assessee received capital goods falling under Chapter Heading 8431, 8424 and 7326 of the Central Excise Tariff Act, 1985. The predecessor in title of the Cenvat Credit/Input Credit is known as Modvat Credit and that was availed by the assessee under Rule 57Q of the Central Excise Rules,1944. During the relevant period, according to the Revenue, these goods and falling under the Chapter referred above were not specified as capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... combustion engines falling under heading No.84.07 or 84.08 and of a kind used in motor vehicles, compressors falling under heading No.84.13 and of a kind used in refrigerating and air-conditioning appliances and machinery heading or sub-heading Nos.84.15, 85.18, 8422.10, [8424.10, fire extinguishers falling under subheading No.8424.80, 8424.91, 8424.99], 84.29 to 84.37, 84.40, 84.50, 84.52, 84.69 to 84.73, 84.76, 84.78, expansion valves and solenoid valves falling under sub-heading No.8481.10 of a kind used for refrigerating and air-conditioning appliances and machinery); 3. All goods falling under chapter 85 (other than those falling under heading Nos.85.09 to 85.13, 85.16 to 85.31, 85.39 and 85.40); 4. All goods falling under heading Nos.90.11 to 90.13, 90.16, 90.17, 90.2 (other than for medical use), 90.24 to 90.31 and 90.32 (other than of a kind used for refrigeration and air-conditioning appliances and machinery); 5. Components, spares and accessories of the goods specified against S.Nos.1 to 4 above; 6. Moulds and dies; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of final products in his factory. (7) The credit of the specified duty on capital goods [other than those capital goods covered under S.Nos.5, 7, 10, 11 and 12 of column (2) of the Table below sub-rule (1)] and received in the factory on or after the 1st day of January, 1996, shall not be taken on a date prior to the date on which such capital goods are installed or, as the case may be, used for manufacture of excisable goods in the factory of the manufacturer as certified by such manufacturer or a person designated by him for this purpose. (8) Notwithstanding anything contained in sub-rule (7), a manufacturer intending to remove the capital goods from his factory for home consumption or for export, prior to their being installed or used, as the case may be, shall be allowed to take credit on the date on which such capital goods are so removed by him from his factory on payment of the appropriate duty of excise leviable thereon as provided in rule 57S . 13. If we peruse the clear language of this Rule, firstly, sub-rule (1) speaks about the applicability of this Rule. The Rule will apply to the goods, if specified in Table column (3) as the final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods is in respect of the fire extinguisher falling under chapter 8424.80 and for items other than this extinguisher falling under chapter 8424.80, credit is admissible. As regards goods falling under chapter 8431, all items on which credit was availed though falling under Chapter 8431 but being parts of conveyor, therefore, even though the goods under Chapter Heading 8431 are excluded at Sr.No.2 of the table, they are covered and admissible as per Sr.No.5 of the table. 21. For the purpose of Sr.No.5, components, spares and accessories of the goods specified against Sr.Nos. 1 to 4, irrespective of classification under any Chapter Heading, Modvat or Cenvat credit is admissible. 22. If Sr.No.5 is carefully perused and particularly, in the light of Sr.No.2, what emerges is that Rule 57Q applies to the goods described in column 3 of the Table below it and to goods referred to as capital goods described in the corresponding entry in column 2 of the said Table, used in the factory of the manufacturers of final products. Eventually, we have to consider the credit of duty paid on capital goods used by manufacturer of the specified goods. All goods falling under Chapter 84, except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Nos.84.15, 85.18, 8422.10, 8424.10 and fire extinguishers falling under sub-heading referred above, 84.28 to 84.37 etc. and expansion valves and solenoid valves are, therefore, the excluded category. Parts of the conveyor are classified under 8431 and conveyor is classified under 8428.00. Therefore that is clearly covered, but chapter heading 8431 is excluded in Sr.No.2 but being part of a conveyor, it is covered under Sr.No.5 of the Table, is the assessee's contention. 28. Sr.No.5 of the Table, though entirely not reproduced in the Tribunal's order, that refers to components, spares and accessories of the goods specified against Sr.Nos.1 to 4. 29. The Tribunal tried to support its conclusions by relying upon the Circular No.276/110/96-TRU dated 2nd December, 1996. That Circular reads as under :- Modvat credit on components, spares and accessories under Rule 57Q Rule 57Q of the Central Excise Rules, 1944 allows credit of duty paid on capital goods used by the manufacture of specified goods. Capital goods eligible for credit have been defined in Explanation (1) annexed to Rule 57Q. Clauses (a) to (c) of the said Explanation cover specified capital goods falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not restricted only to the components, spares and accessories falling under Chapters 82,84, 85 or 90 but covers all components, spares and accessories of the specified goods irrespective of their classification. Same was the position and prior to amendment in Rule 57Q i.e. prior to 23rd July, 1996 when credit was available on components, spares and accessories of the specified capital goods irrespective of their classification. 31. Pertinently, this Circular is dated 2nd December, 1996. 32. The Table which has been relied upon by the Tribunal is reproduced by us and what the Tribunal had before it is the Table containing Sr.No.5 components, spares and accessories of the goods specified against Sr.Nos.1 to 4. Sr.Nos.1 to 4 refer to all goods falling under Chapter 84, all goods falling under Chapter 85 and all goods falling under Heading Nos.90.11 to 90.13, 90.16, 90.17, 90.22 (See Sr.No.4). If the description of capital goods, within the Schedule to the Central Excise Tariff Act, 1985, used in the factory of the manufacturer, is given in column No.2, but for the purposes of availing of credit of duties paid on capital goods, not all goods falling under the chapter are term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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