MADRAS CEMENTS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The short point involved in these appeals is whether the Appellant/Assessee is eligible for Modvat Credit on certain goods for the period comprising November and December, 1999.

(2.) The Appellant, M/s Madras Cements Ltd., Alathiyur, hereinafter referred to as 'the Assessee' is the holder of Central Excise Registration No. 1/Cement/97 and is engaged in the manufacture of cement and clinker coming within the ambit of Chapter 25 of the Central Excise Tariff Act, 1985 hereinafter referred to as 'CETA, 1985'.

(3.) The Revenue's contention is that for the months of November and December, 1999, the Assessee had taken Modvat Credit on ineligible capital goods amounting to Rs. 8,42,843/-. The further contention of the Revenue is that the Assessee was not entitled to such credit, inasmuch as, it had taken Modvat Credit on items which did not come within the purview of capital goods under Rule 57Q of the Central Excise Rules, 1944 although it was claimed by the Assessee that the said items comprised components, spares and accessories within the meaning of Explanation 1(d) of Rule 57Q(1) relating to capital goods. Accordingly, on 31st March, 2000, the Assessee was issued show cause notice No. 11 of 2000 asking it to show cause as to why the amount of Modvat Credit of Rs. 8,42,843/- should not be disallowed and recovered under Rule 57U(3) of the Central Excise Rules, 1944, and why interest at the rate of 20% per annum should not be demanded under Rule 57U thereof, if the Modvat Credit wrongly availed was not paid within three months from the date of receipt of the demand notice. The Assessee was also asked to show cause as to why a penalty should not be imposed under Rule 173Q(b)(b) of the aforesaid Rules.