OSWAL OVERSEAS LIMITED Vs. CCE

JUDGEMENT

(1.) THIS appeal arises from order dated 25.02.2007 passed by the Commissioner (Appeals) Meerut -II. Under the impugned order, the appeal filed by the appellants against the order of the adjudicating authority has been dismissed. The Assistant Commissioner, Bareilly by his order dated 18.10.2006 had confirmed the demand of Rs. 22075/ - under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 against the appellants which was raised vide show cause notice dated 28.10.2005 and had imposed penalty of equal amount under Rule 15 of the said rules and also had directed the appellant to pay interest on the amount due and payable under the said order.

(2.) FEW facts relevant for the decision are that the appellants are engaged in manufacture of sugar and molasses classifiable under Chapter heading No. 1701 and 1703 of the Central Excise Tariff Act, 1985. The appellants availed cenvat credit to the tune of Rs. 22075/ - during the period May 2005 to August 2005 on the items namely welding electrodes classifiable under heading 83.11, asbestos jointing sheets classifiable under sub -heading 68.05 and M.S. Plates as the capital goods. Disputing the claim of the appellants about entitlement to avail the cenvat credit in relation to the welding electrodes and asbestos jointing sheets, a show cause notice dated 28.10.2005 came to be issued to the appellants requiring the appellants to show cause as to why the credit to the tune of Rs. 22075/ - in relation to the said items should not be disallowed and as to why the amount should not be recovered. The proceedings were contested by the appellants contending that the welding electrodes were the components and accessories of the capital goods as defined under Section 2(a)(A)(i) of the Cenvat Credit Rules, 2004 and were used for welding of various pipelines, equipments and machinery in the appellant's factory and were used in the process of replacing the worn out parts of the plant and machinery. As regards the asbestos jointing sheets it was contended that they were used for welding of various pipelines installed inside the factory and allowing flow of liquid during the process of manufacture from one equipment to another and further that without the use of this item it would not be feasible to carry on manufacturing smoothly inasmuch as that there would be leakage from the pipes and the manufacturing process would be badly affected. The contention of the appellants were rejected and the assessing authority confirmed the demand as stated above. The appeal carried against the same did not yield fruitful results. Hence, the present appeal.

(3.) LEARNED Jt. CDR on the other hand, submitted that the authorities below after taking into consideration the materials on record have arrived at correct findings and the same do not warrant any interference by the Tribunal.