TMI Blog2022 (9) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... r can be said to be a different equipment distinct from the Coke Oven Battery and cannot be considered to be a part of the Coke Oven Battery. In that view of the matter, the appellant shall not be entitled to the Modvat credit on Guide Car as component and/or part of Coke Oven Battery as claimed by the appellant. The Adjudicating Authority as well as the learned Tribunal have rightly confirmed the demand of Modvat credit availed by the appellant on Guide Cars . Levy of penalty - HELD THAT:- The penalty was not justified at all. The appellant bonafidely believed that the goods would fall under Chapter sub-heading 8428.90 and/or that the Guide Car can be said to be a component of the Coke Oven Battery. Therefore, the order of penalty of Rs.1,00,000/- imposed by the Tribunal is required to be quashed and set aside. Whether classification of the Guide Car under Chapter sub-heading 8603.00 shall be applicable prospectively and shall not be applicable retrospectively with respect to supply in the month of November, 1999? - HELD THAT:- It is required to be noted that it was a case of self-assessment by the supplier and the supplier classified the Guide Car under Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Modvat credit on Guide Car was not available since it was classifiable under Chapter subheading 8603.00 of the Central Excise Tariff Act, 1985 (hereinafter referred to as the Tariff ). 3.1 The appellant replied to the show cause notice. It was the case on behalf of the appellant assessee that there was no reason as to why Guide Car should be classified under Chapter sub-heading 8603.00. According to the appellant assessee, Guide Car is classifiable under Chapter sub-heading 8428.90, as was being done by the supplier of the same to the appellant. An opportunity of personal hearing was also provided to the appellant. 3.2 Considering the fact that in the case of supplier, the Guide Car was classified under Chapter sub-heading 8603.00, the Adjudicating Authority was of the opinion that the appellant shall not be entitled to the Modvat credit on Guide Car considering Rule 57Q of the Central Excise Rules, 1944 (hereinafter referred to as the Rules 1944 ). The Adjudicating Authority disallowed the credit amounting to Rs. 1,71,60,376/- wrongly availed by the appellant during the month of March, 2000 which included the Modvat credit availed by the appellant on Gui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case supply of Guide Car was in the month of November, 1999 and the Guide Car was classified by the appropriate authority under Chapter sub-heading 8603.00 subsequent to those supply and therefore the classification of Guide Car under heading 86.03 shall not be made applicable retrospectively and it shall be made applicable prospectively. Reliance is placed on the decision of this Court in the case of Collector of Central Excise, Baroda v. Cotspun Limited, (1999) 7 SCC 633. 4.3 It is further submitted by Shri V. Sridharan, learned Senior Advocate appearing on behalf of the appellant that in the facts and circumstances of the case and as there was no suppression and/or mala fide intention on the part of the appellant in claiming the Modvat credit on Guide Car and the appellant bonafidely believed that Guide Car would fall under Chapter sub-heading 8428.90 and therefore no penalty is leviable. 4.4 Making the above submissions and relying upon the aforesaid decision, it is prayed to allow the present appeal. 5. Shri V. Chandrashekara Bharati, learned counsel appearing on behalf of the respondent Revenue, while opposing the present appeal, has vehemently submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter in this section, referred to as the final products ) described in column (3) of the Table given below and to the goods (hereafter in this section referred to as capital goods ), described in the corresponding entry in column (2) of the said Table used in the factory of the manufacturer of final products. TABLE S.No. Description of capital goods falling within the Description of final Schedule to the Central Excise Tariff Act, 1985 (5 of products 1986) and used in the factory of the manufacturer (1) (2) (3) 1. xxx xxx xxx 2. xxx xxx xxx 3. xxx xxx xxx 4. xxx xxx xxx 5. Components, spares and accessories of the goods Specified against S. Nos. 1 to 4 above Therefore, the short question which is posed for the consideration of this Court is, whether Guide Car can be said to be component of Coke Oven Battery as claimed by the appellant? 8. This Court had an occasion to consider the expression component in the case of Saraswati Sugar Mills (supra). In the aforesaid decision, this Court had an occasion to consider th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 26. In order to determine whether a particular article is a component part of another article, the correct test would be to look both at the article which is said to be component part and the completed article and then come to a conclusion whether the first article is a component part of the whole or not. One must first look at the article itself and consider what its uses are and whether its only use or its primary or ordinary use is as the component part of another article. There cannot possibly be any serious dispute that in common parlance, components are items or parts which are used in the manufacture of the final product and without which, final product cannot be conceived of. 27. The meaning of the expression component in common parlance is that component part of an article is an integral part necessary to the constitution of the whole article and without it, the article will not be complete . Therefore, the test would be whether the Guide Car can be said to be an integral part necessary to the constitution of the whole article, namely, Coke Oven Battery and whether without it, the Coke Oven Battery shall not be complete? 9. Considering the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applicable to the facts of the case on hand. In the case before this Court, it was a case of an approved classification list sought to be corrected subsequently and to that it is observed that the levy of excise duty on the basis of an approved classification list is the correct levy, at least until the correctness of the approval is questioned by the issuance of a show cause notice to the assessee. Therefore, on facts, the aforesaid decision shall not be applicable to the facts of the case on hand. 12. In view of the above and for the reasons stated above, the present appeal with respect to Modvat credit claimed by the appellant on Guide Car is hereby dismissed. The Adjudicating Authority as well as the learned Tribunal have rightly denied the Modvat credit to the appellant on Guide Car . The learned Tribunal has rightly confirmed the demand of Rs. 45,86,664/- being the Modvat credit availed by the appellant on Guide Car . The present appeal is dismissed so far as the confirmation of demand of Modvat credit availed by the appellant on Guide Car . However, the order of penalty imposed by the Adjudicating Authority, modified by the learned Tribunal to Rs. 1,00,000/- is he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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