SATIA WOLLENS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) IN this appeal, filed by M/s. Satia Woollens Pvt. Ltd., the issue involved is whether Modvat Credit of the duty paid on capital goods, is available to them.

(2.) SHRI K.K. Anand, learned Advocate, submitted that the appellants manufacture wool tops, which were exempt from payment of excise duty when they started manufacturing activity in January 1995; that they had imported certain machinery in the month of September/October 1994 and did not avail of Modvat Credit as no duty was payable on the final product; that the Central Excise duty on wool tops became payable from 16.3.1995; that, thereafter, they claimed the Modvat Credit of the duty, in respect of machines; that the Commissioner (Appeals) has rejected their appeal holding that subsequent imposition of duty would make previously received and installed capital goods, eligible for Modvat Credit. The learned Advocate, further, submitted that the capital goods were installed in January 1995 and these were used only for a period of about two and half months; that the final products were exempted from payment of duty; that these capital goods had a life of not less than 7 -10 years and since 16.3.95 the duty had become payable, these had been used for manufacture of final products on which duty was chargeable. The learned Advocate relied upon the decision of the Tribunal in the case of CCE, Raipur v. Jindal Steel and Power Ltd. [Final Order No, A/452/03 -NB (C) dated 5.9.2003] : [reported in 2003 (90) ECC 658 (T)], wherein the Modvat Credit of the duty had been allowed on the ground that the machines would be used, subsequently, for the manufacture of goods liable to Central Excise duty.

(3.) COUNTERING the arguments, Shri Kumar Santosh, learned SDR, submitted that when the machines, in question, were imported and installed, the appellants, admittedly, were manufacturing goods which attracted nil rate of duty; that the eligibility of the capital goods of Modvat Credit has to be examined and judged at the time the capital goods are received and not what happens subsequently. In support of his contention, he relied upon the decision of the Tribunal in the case of CCE, Indore v. Surya Roshni Limited, 2003 (88) ECC 730 (CEGAT -Del.): 2003 (58) RLT 500 (CEGAT -Del.).