HINDUSTAN ZINC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of non -ferrous metals and by -products. During April to June 1999, they took Modvat credit to the tune of Rs. 3,12,622/ - on HR/CR Sheets, HR/SS Plates and Plain Plates under Rule 57Q of the erstwhile Central Excise Rules, 1944. They also took credit of Rs. 517/ - on thermocouples during the same period. The show -cause notice, which was issued to deny the credits, alleged that the sheets and plates, having been used as raw materials for fabrication of various parts of the manufacturing plant, were not to be treated as parts of any machinery under Rule 57Q ibid. In relation to thermocouples, it was alleged that the said items, which were covered under Central Excise Tariff Heading 90.33, stood excluded from the category of modvatable capital goods. The allegations were denied by the appellants. The adjudicating authority disallowed the entire credit and imposed a penalty of Rs. 20,000/ - on the party. The Commissioner (Appeals) upheld the denial of Modvat credit but vacated the penalty. In the present appeal, filed by the party challenging the denial of Modvat credit, the main ground is that the sheets and plates which were used for replacement of worn out parts of various machines are covered by 'components or spares' of such machines and, therefore, the benefit of Sl. No. 5 of the Table annexed to Rule 57Q (as the rule stood at the material time) should be extended to the items. The appellants have drawn support from dictionary meaning of the word 'component' as also from certain decisions of the Tribunal. In respect of thermocouple, however, there appears to be no serious challenge in the appeal.

(2.) HEARD both the sides.

(3.) LD . Counsel for the appellants reiterates the aforesaid grounds of the appeal and relies on a decision of this Bench rendered in an earlier appeal of the present appellants, reported as [2002 (150) E.L.T. 675 (T -Del.) = 2002 (53) RLT 70]. He also relies on a decision of this Bench in Simbhaoli Sugar Mills Ltd. v. CCE, Meerut [2001 (135) E.L.T. 1239 (Tribunal -Del.)] and points out that this decision has been affirmed by the Supreme Court.